Dorpac Corporation has a dividend yield of 1.3%. Its equity cost of capital is 7.8%, and its dividends are expected to grow at a constant rate.

a. What is the expected growth rate of Dorpac's dividends?

The growth rate will be __%

b. What is the expected growth rate of Dorpac's share price?

A. With constant dividend growth, the share price is expected to grow at rate g=7.8%.

B.With constant dividend growth, the share price is expected to grow at rate g=1.3%.

C.With constant dividend growth, the share price is expected to grow at rate g=6.5%1.3%=5.2%.

D.With constant dividend growth, the share price is expected to grow at rate g=6.5%.