The stock of the XYZ Corporation is expected to pay an annual dividend of 4 in one year. This dividend is expected to grow at a rate of 2% per year in perpetuity therafter. The appropriate discount rate is 11%.

What is the fair price of the stock?

Now, the XYZ corporation announces that it needs to suspend making dividend payments in order to maintain it's current level of growth. It will cancel its expected dividend payment of 4 next year but will continue making its expected dividend payment of 41.02=4.0841.02=4.08 two years from now (and the growth is expected to continue as before). What is the new expected price of the stock?