Constant growth: Reco Corp. is expected to pay a dividend of$2.14 next year. The

Constant growth: Reco Corp. is expected to pay a dividend of$2.14 next year. The forecast for the stock price a year from nowis $40.50. If the required rate of return is 14.5 percent what isthe current stock price? Assume constant growth.Constant growth: Jenny Banks is interested in buying the stock ofFervan Inc. which is growing at a constant rate of 7.0 percent.Last year the firm paid a dividend of $2.65. Her required rate ofreturn is 19.0 percent.