Total Return $=$ ke $=$ Dividend Yield $($DY$)+$ Capital Gains Yield $($CGY$)$

$=$ D$1/$P$0+($P$1$ P$0)/$P$0=$ D$1/$P$0+$ g

Estimation of the Growth Rate $($g$)$: g $=$ Retention Ratio $*$ ROE

Question: Tobias Industries expects to earn $$100,000$ this year. Earnings will grow $6\%$ if the firm makes no new investments. Jim Tobias, CEO of the firm, has the opportunity to invest in a $$new$$ line of business $$ which will complement their current products. The immediate outlay for this opportunity is $$200,000$ and the earnings from the line will generate $$80,000$ in additional earnings $($per year, in perpetuity$).$ The earnings from this new line will grow at $4$ percent. Assuming the firm's discount rate is $12\%,$ and $200,000$ shares of Tobias Industries stock is outstanding, answer the following?

a$)$ What is the price per share of Tobias stock without the cabinet line?

b$)$ What is the value of the growth opportunities which the $$new$$ line offers?

c$)$ If the company invests in the $$new$$ line, what would be the price of the stock?