Stock Valuation: A stock that you are evaluating paid a dividend of $3.50 at the end of last year.

a) If the dividend growth rate is zero, what is the fair present value if the required rate of return on the stock is 10%?

b) If the dividend growth rate is 2% forever, what is the fair present value if the required rate of return on the stock is 10%?

c) What is the dividend yield of the stock in case a and case b above?