A. Lohn Corporation is expected to pay the following dividends over the next four years: $10, $8, $4, and $3. Afterward, the company pledges to maintain a constant 4 percent growth rate in dividends forever. If the required return on the stock is 10 percent, what is the current share price?

B.

Lohn Corporation just paid a dividend of $15, but management expects to reduce the payout by 11 percent per year indefinitely.

If you require a return of 18 percent on this stock, what will you pay for a share today?