11. Silicon is a blue chip company listed on NASDAQ and since it has businesses in more than 60 countries, it is expected that it can distribute stable dividends with a growth rate of 1.2% every year and the market expects it can generate 5% return on the common stock. The dividends of the common stock just distributed were $6 per share.

a. What is the common stock price today and what is the theoretical common stock price 3 years later?

b. Silicon also issued preferred shares (constant dividends paid every year forever) with a stated value of $100 each with 5% dividends 5 years ago. The next dividend will be paid today and you will receive the next dividend. The required return on the preferred stock is 4%. What is the price of the preferred stock today?