Hilroy Company does not currently pay a dividend. Companies with similar risk are expected to generate a return of 12%. It is now January 2019.

a. If the market expects the company to begin an end-of-year dividend of $2.00 per share beginning in 2022, and that the divided will grow at a constant rate of 3% per year thereafter, what would be the price of the stock per share be on January 1, 2022?

b. What would the current stock price be (January 1, 2019)?

c. The company has an outstanding issue of preferred shares, with a current yield of 7%. If

the annual dividend is $8.00, what would be the price of the preferred share?