Currently $($time $0)$ Company A is expected to survive another year in business $($until time $1).$ At which time the firm will liquidate and all value will be distributed to claimants. The firm is presently all equity financed with $50,000$ shares outstanding. The cash flow of the firm is risk free and it is common knowledge that Company A will receive $$1$ million immediately $($at time $0)$ and another $$1$ million at time $1.$ The company's current dividend policy is to pay out its entire free cash flow as dividends as it is received $($so $$20$ per share now and at time $1).$ Assume the risk free rate in the economy is $5\%$ and the firm has no positive NPV projects available. Calculate the current price per share $($at t$=0)$ before the dividends are paid out. Using the information in question #$1,$ calculate the current price per share $($at t$=0)$ before the dividends are paid out if the firm issues risk$-$free bonds to pay out an additional $$2$ per share dividend at t$=0.($Hint: A $$2$ per share dividend requires $$1,100,000$ in total so the firm must raise $$100,000$ to accomplish this policy change. Assume the firm can issue risk$-$free bonds to raise $$100,000$ today if they promise to repay $$105,000(5\%$ risk free rate$)$ in one year.$)$ Using the information in question #$1,$ calculate the current price per share $($at t$=0)$ before the dividends are paid out if the firm reduces its dividend by $$2$ per share dividend at t$=0.($Hint: With an $$18$ per share dividend today, this leaves an extra $$100,000$ in cash within the firm. Because the firm has no positive NPV projects it does the next best thing and makes a zero NPV investment, buying t$-$bills at the $5\%$ risk free rate.$)$