PLEASE ANSWER BOTH PARTS:

PART A:

ABC Corp. has just paid a dividend of $0.55. ABC has an annual required return of 9.95%.

From now on, assume that the dividend of $0.55 was a quarterly dividend. What is the quarterly discount rate?

What is the value if dividends are constant and quarterly?

We now think that dividends will grow by 0.3% from quarter to quarter. The firm just paid the quarterly dividend of $0.55. What is the value of the stock

A different analyst thinks that ABC's dividends will grow by 5% for the next 4 quarters, and then grow by 0.3% thereafter. What is the value of the stock?

PART B:

Southern Power just paid an annual dividend of $6.8 per share. Because of increasing competition from home solar installations, the dividend is expected to shrink by 4% per year. The required rate of return is 8%.

What is the value of the stock?