Part a. FadCo, Inc. is a high-growth company. Its stock is trading at $100 per share. It pays dividends annually and next year's dividend per share is expected to be $5 per share. The market expects a constant growth rate of dividends in perpetuity of 10%. What is the market's required rate of return on FadCo stock?

Part b. Suppose the market expectations about future dividend growth stays at 10%, but the dividends will only last for ten years, after which there will be no further dividends on the stock. Assume the required rate of return on the stock says the same as in part a. What is the new stock price of FadCo stock?