The ABC company, based in Colchester, is considering a policy of paying $100\%$ of its earnings

as dividends. The data for the firm are given in the following table. Use this information to answer the questions.

Annual Earnings : $1\mathrm{.}2$ mill

Annual Earnings Growth : $0$

Earnings Growth Forecast : zero growth is expected to increase indefinitely

risk$-$free interest rate: $3\%$

Expected Return on the market: $8\%$

Beta: $0\mathrm{.}9$

Shares Outstanding: $20$mill

a$)$ What is the price per share of ABC?

b$)$ Suppose the firm switches its payout policy to pay $60\%$ of earnings as dividends

instead of $100\%.$ The retained earnings are reinvested at the cost of capital for the

firm. What is dividend growth now?

c$)$ What is the value per share now?