3. Zoltan Technologies has both preferred stock and common stock.

A. Their common stock currently sells for $89.30 and pays a dividend of $0.90 per year with a growth rate of 5.3% per year. What is the required rate of return for their common stock?

B. If their preferred stock pays a dividend of $32 per year and the discount rate is 3%, what is the value of this preferred stock?