Stock X currently has income per share of $$8.$ It pays $$3$ in dividends. It has investments that generate returns of $25\%.$ Stockholders require a return of $22\%$ for Stock X$.$ Stock Y currently has income per share of $$10.$ It pays $$2$ in dividends. It has investments that generate returns of $10\%.$ Investors require a return of $15\%$ for Stock Y$.$ Both Stock X and Stock Y expect their dividends to grow at a constant rate. $4$

$1.$ What is the retention ratio of Stock X$?$

$2.$ What is the dividend growth rate of Stock X$?$

$3.$ What is the value of Stock X according to the constant growth rate model of stock valuation?

$4.$ If Stock X has a price of $$35,$ will you invest in Stock X$?$ Why or why not?

$5.$ What is the retention ratio of Stock Y$?$

$6.$ What is the dividend growth rate of Stock Y$?$

$7.$ What is the value of Stock Y according to the constant growth rate model of stock valuation?

$8.$ If Stock Y has a price of $$15,$ will you invest in Stock Y$?$ Why or why not?