(a) What is the value of a stock expected to pay a constant $3.50 dividend each year forever if the market required rate of return is 18%?

(b) What is the estimated value of a stock, which intends to pay the dividend of $2.50 five years from now (at the end of year 5), expects dividends to grow at 10 percent? The Beta of this stock is 1.5. The yield on a 10-year government bonds is 3% the long-term return of the ASX200 (i.e. the market portfolio) is 11%.