1. a) Blue Corp. is evaluating an extra dividend versus a share repurchase. In either case, $6,000 would be spent. Current earnings are $0.86 per share and the stock currently sells for $44 per share. There are 2,500 shares outstanding. Ignore taxes and other imperfections.

If Blue Corp. pays a dividend, what will be the dividend per share? After the dividend is paid, how many shares will be outstanding and what will the price per share be? Enter your answers rounded to 2 DECIMAL PLACES.

Dividend =

Shares outstanding =

stock price =

b) Given that you will have $1637490.82 saved on the day you retire, how much will you be able to spend each year starting at the end of the first year of retirement, if you want to spend in perpetuity?

c) What is the effective annual rate if the annual percentage rate is 14% compounded daily? Enter your answer as a percentage rounded to two decimal places. Do not include the percentage sign in your answer. Do not round the decimal number after you have performed the division of the interest rate. Answer as a percentage.

NOTE: Fractional shares are possible (Ex. 0.83 shares)

Please answer all 3 parts and show your work for a thumbs up! Thanks