You expect a share of stock to generate earnings per share of $$4,$ $$4\mathrm{.}5$ and $$5$ for each of the next $3$ years. After that, the earnings and dividends will grow at the sustainable growth rate until infinity.

a$.$ If the company maintains a stable payout ratio of $60\%$ for its dividends and generates a rate of return of $20\%$ on its equity, what is the sustainable growth rate?

b$.$ Assuming investors expect a $12\%$ rate of return on the stock, what is the price of the stock today?