Only accept hand-written assignment. Use pen and paper, ipad or tablet, save as pdf file and upload. After uploading your assignment, download and open it to make sure that the file is not corrupted. Please keep at least 2 decimal points for dollar amounts and at least 4 significant digits for rates.

Question 1

ABC plans to pay dividends of $20, $80, and $20 (per share) in the next three years and $150 (per share) liquidating dividend in year 4. You own 150 shares of stock. The required return on the stock is 10%.

a) If you want equal dividends in each of the four years, how many shares you must buy/sell in each year? (Positive value for buy and negative value for sell)

b) Redo part a) if you want total dividends of $9,000 and $12,000 in year 2 and year 3 respectively and equal amount in year 1 and year 4.