Question 1: The market value balance sheet for Cherry Pie Corp. reflects cash of $31,020, fixed assets of $539,750, and equity of $286,800. There are 6,000 shares of stock outstanding with a par value of $1 per share. The company has announced that it is going to repurchase $20,000 of stock. What will the price of the stock be after this repurchase?

A) $47.80 B) $46.60

C) $46.20 D) $47.60 Note: Answer the question with proper and clear steps and formulas written down.

(15 marks) Question 2:

You own 900 shares of Dell Hardware. The company plans on issuing a dividend of $1.98 a share one year from now and then issuing a final liquidating dividend of $11.32 a share after one additional year. Your required rate of return on this security is 16.5 percent. Ignoring taxes, what is the value of one share of this stock to you today?

A) $10.30 B) $9.43

C) $10.04 D) $9.92

Note: Answer the question with proper and clear steps and formulas written down.

(15 marks)