Mercier corporation's stock is selling for $95. It has just paid a dividend of $5 per share. The expected growth rate in dividends is 8%.

i. What is the required rate of return on this stock?

ii. If the growth rate is 10% annually (instead of 8%), what will the stock price be?

iii. Given your answers to parts (i) and (ii) above, how important are investors' expectations on future dividend growth to the current stock price and why?