Question: Part A: You own shares of ABC Corporation, which just paid a dividend of $1.77 per share. You have projected a long-term constant growth rate for the dividends of 6.9%. If your required rate of return on the stock is 10.1%, what is the highest price that you would be willing to pay for additional shares of this stock?

Part B: ABC pays consistent dividends that grow at a constant rate. ABC is expected to pay a dividend one year from now of $1.99 and the current price of the stock is $70.21. If the expected rate of return on the stock is 11.6%, then based on the discounted cash flow model assumptions, what is the projected long-term growth rate of the dividends?