a$)$ Over the next five years, Richmond Electronics Inc. is expected to pay annual dividends of $$6\mathrm{.}50,$ $$6\mathrm{.}70,$ $$6\mathrm{.}90,$ $$7\mathrm{.}50.$ and $$7\mathrm{.}75.$ In addition, the stock price is expected to be $$75\mathrm{.}00$ five years from now. If the required return on equity for Richmond Electronic is $15\%,$ what is the fair price for this stock?

$($b$)$ California Electric Supply is a public utility holding company with a $5\mathrm{.}75\%$ cumulative perpetual preferred stock listed on the New York Stock Exchange. The par value of the preferred stock is $$100.$ If the required return on this stock is $8\mathrm{.}00\%,$ estimate the fair value of the stock.

$($c$)$ Compare and Contrast Price$/$Earnings ratio Vs$.$ Price$/$ Cash Flow ratio highlighting the rationale and pitfalls of each ratio.