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1) Sunhills Inc. has declared the $5.10 per-share dividend. Assume capital gains are not taxed, but dividends are taxed at 15%. New IRS regulations need that taxes be suspended at time the dividend is paid. Sunhills sells for $93.85 per share, and stock is about to go to ex dividend. What do you believe ex-dividend price will be?

2) Far Side Corporation is expected to pay given dividends over next four years: $8, $4, $2, and $1. Afterward, company pledges to sustain constant 6%growth rate in dividends forever. If needed return on stock is 14%, the present share price is $.

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