Chiptech, Inc., is an established computer chip firm with several profitable existing products as well as some promising new products in development. The company earned $2.1 a share last year, and just paid out a dividend of $0.84 per share. Investors believe the company plans to maintain its dividend payout ratio at 40%. ROE equals 23%. Everyone in the market expects this situation to persist indefinitely. a. What is the market price of Chiptech stock? The required return for the computer chip industry is 16%, and the company has just gone ex-dividend (i. e., the next dividend will be paid a year from now, at t = 1). (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Market price of Chiptech stock$
b. Suppose you discover that Chiptech