Delta currently trades at a price of $44.55 and just paid a dividend of $0.43. The long-term historical growth rate of dividends for the S&P 500 is 6%.

1. Assume the dividends grow at 6% in perpetuity and the discount rate is 8%, what is your estimated price of delta

2. Over the last three years, dividends for the S&P 500 have grown at a rate of 9.8%. Assume that dividends grow at this rate for the next five years. What perpetuity dividend growth rate is needed to justify its current price of $46.56? Assume the discount rate is still 8%