Most corporations pay quarterly dividends on their common stock rather than annual dividends. Barring any unusual circumstances during the year, the board raises, lowers, or maintains the current dividend once a year and then pays this dividend out in equal quarterly installments to its shareholders. (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.)

a. Suppose a company currently pays a $3.60 annual dividend on its common stock in a single annual installment, and management plans on raising this dividend by 6% per year indefinitely. If the required return on this stock is 12%, what is the current share price?

Current share price

b. Now suppose the company in (a) actually pays its annual dividend in equal quarterly installments; thus, the company has just paid a $0.90 dividend per share, as it has for the previous three quarters. What is your value for the current share price now? (Hint: Find the equivalent annual end-of-year dividend for each year.)

Current share price