Carlson Enterprises' common stock dividend is expected to grow at4% per year. The dividend recently paid was $0.38 per share, and the required return is 7%.

a. What is the estimated value of the common stock?

b. If the value of a common stock was $87 per share and dividends were recently $2.49, but expected to grow at 5% per year, what would be the required rate of return?