Durable.Co is a company that has slowly but steadily grown at the constant rate of 2%. You expect the company to do so in the future. This year, the company paid out $2 dividend per share and it is expected to grow at the annual rate of 2% also.

a) Given the information, how much would you pay for the company's stock? Similar stocks provide the annual return of 6%.

b) Currently ROE of the company is 6% and the payout ratio of the company is 2/3. What is the present value of the growth opportunity of the company?