*You are required to show your work. Providing answers alone will not get you full credit.

2)Suppose ZBA Inc., just paid a dividend of $4 per share. It is expected that the dividends will grow at a constant rate of 3 percent per year indefinitely. If investors require a 10 percent return on ZBA stock,

a. What is the current price today? (3 marks)

b. What will the price be in three years? (2 marks)