In early2018, Coca-Cola Company(KO) had a share price of $42.57, and had paid a dividend of $1.44 for the prior year. Suppose you expectCoca-Cola to raise this dividend by approximately 6.4% per year in perpetuity.

a. IfCoca-Cola's equity cost of capital is 8.5%, what share price would you expect based on your estimate of the dividend growthrate?

b. GivenCoca-Cola's shareprice, what would you conclude about your assessment ofCoca-Cola's future dividendgrowth?

a. IfCoca-Cola's equity cost of capital is 8.5%, what share price would you expect based on your estimate of the dividend growthrate?

Coca-Cola's price per share should be $

nothing

. (Round to the nearestcent.)

b. GivenCoca-Cola's shareprice, what would you conclude about your assessment ofCoca-Cola's future dividendgrowth?

GivenCoca-Cola's shareprice, it's dividend growth rate should be

nothing

%. (Round to two decimalplaces.)