Fijian holdings limited last divident was $1.25 and the directors expect to maintain the historic 4 percent annual rate of growth.you plan to purchase the stock today because u feel that the growth rate will increase to 7 percent for the next 3 years and the stock will then reach $25.00 per share.

1.how much should u be willing to pay for the stock if you require a 16% return?

2. How much should you be willing to pay for the stock if you feel that the 7% growth rate can be maintained indefinitely and you require a 16% return?