The Blanco Butter Co. paid a dividend last year of $3.25 and had a dividend yield of 4.6% and EPS of $5.42. The firm increases dividends by 3.9% yearly.

A. If your required return is 11%, what is the most your should pay for this stock based on its dividend return?

B. The company is going to eliminate dividends this year due to the economy and expects earnings to decrease by 14%. Assuming the P/E stays the same, what is the expected stock price?