You expect a share of stock to pay dividends of $1.00, $1.25,
and $1.50 for each of the next 3 years. After that, the dividends
will grow at the sustainable growth rate until infinity. a.
Calculate the sustainable growth rate assuming the company
generates a rate of return of 20% on its equity and maintain a
plowback ratio of 0.3. b. Assuming investors expect a 12% rate of
return on the stock, what is the price of the stock today?