Dividends for Sepia Ltd are expected to be $0.50 next year. The company retains 25% of its earnings each year which are reinvested to earn a rate of return of 15%p.a. Assume the required rate of...

Dividends for Sepia Ltd are expected to be $0.50 next year. The company retains 25% of its earnings each year which are reinvested to earn a rate of return of 15%p.a. Assume the required rate of return on these shares is 11%.

(a)   Calculate the expected growth rate.

(b)   Calculate the value of Sepia shares.