a. Calculate Surf & Turf's current stock price, using the constant-growth DCF model from Chapter 4. (Hint : Take the easy route and estimate overall market capitalization.) b . Now Surf & Turf "'s CFO announces a switch from repurchases to a regular cash dividend Next year's dividend will be $2.80 per share. The CFO reassures investors that the company will continue to pay out 50% of earnings and reinvest 50%. All future payouts will come as dividends, however. What would you expect to happen to Surf & Turf's stock price ? Why ? Question Investors and financial managers focus more on changes in cash dividends than on the level of cash dividends . Why ? What is meant by "the information content of dividends "? Explain Question 5 Here are key financial data for House of Herring , Inc .: Earnings per share for 2018 $5.50 Number of shares outstanding 40 million Target payout ratio 50% Planned dividend per share $2.75 Stock price, your-and 2018 $130 House of Herring plans to pay the entire dividend early in January 2019. All corporate and personal taxes were repealed in 2017 . a. Other things equal, what will be House of Herring's stock price after the planned dividend payout ? b. Suppose the company cancels the dividend and announces that it will use the money saved to repurchase shares . What happens to the stock price on the announcement date ? Assume that investors learn nothing about the company's prospects from the announcement. How many shares will the company need to repurchase ? c. Suppose that, instead of canceling the dividend, the company increases dividends to $5.50 per share and then issues new shares to recoup the extra cash paid out as dividends. What happens to the with- and ex-dividend share prices? How many shares will need to be issued? Again, assume investors learn nothing from the announcement about House of Herring's prospects Question 6 Ms. Kraft owns 50,000 shares of the common stock of Copperhead Corporation with a market