(1) Ford Motor, a large automaker, has been mature and is expected to grow steadily for years to come. Fords expected rate of return is 6% on average and the expected dividend for the next quarter is $0.4 per share. The current stock price is $15. What must be the markets expectation of the growth rate of its dividends?

(2) f the long-term dividend growth forecasts for Ford Motor are revised up to 4% per year, what will happen to the stock price of Ford Motor? What (qualitatively) will happen to the companys P/E ratio, assuming the earning expectation remain unchanged?