The stock of Nogro Corporation is currently selling for $$16$ per share. Earnings per share in the coming year are expected to be $$4\mathrm{.}00.$

The company has a policy of paying out $50\%$ of its earnings each year in dividends. The rest is retained and invested in projects that

earn a $25\%$ rate of return per year. This situation is expected to continue indefinitely.

Required:

a$.$ Assuming the current market price of the stock reflects its intrinsic value as computed using the constant$-$growth DDM$,$ what rate of

return do Nogro's investors require?

Note: Do not round intermediate calculations. Round your answer to $2$ decimal places.

b$.$ By how much does its value exceed what it would be if all earnings were paid as dividends and nothing were reinvested?

Note: Do not round intermediate calculations. Round your answer to $2$ decimal places.

c$.$ If Nogro were to cut its dividend payout ratio to $25\%,$ what would happen to its stock price?

Note: Round your answer to $2$ decimal places.

d$.$ What would happen to its stock price if Nogro eliminated the dividend?

Note: Round your answer to $2$ decimal places.