In mid-2015, Coca-Cola Company (KO) had a share price of $ 41.7, and had paid a dividend of $ 1.52 for the prior year. Suppose you expect Coca-Cola to raise this dividend by approximately 6.4 % per year in perpetuity.

a. If Coca-Cola's equity cost of capital is 8.3 %, what share price would you expect based on your estimate of the dividend growth rate?

b. Given Coca-Cola's share price, what would you conclude about your assessment of Coca-Cola's future dividend growth?