Your all$-$equity firm will dissolve in two years and will generate $$100,000$ in year $1$ and $$400,000$ in year $2.$ There are $20,000$ shares outstanding. Required return is $11\%.$ You are considering among three dividend policy alternatives:

Policy I: You maintain a $100\%$ dividend payout ratio in each year.

Policy II: You pay the entire cash flow for both years all in year $1.$ Pay nothing in year $2.$

Policy III: You pay nothing in year $1$ and all of your cash flow in year $2.$

$1.$ In Policy I, calculate the dividend$/$share can you pay in year $2.$

$2.$ In Policy II$,$ what is the maximum you can borrow from new shareholders in year

$1?$

$3.$In Policy II$,$ what is the dividend$/$share you can pay the original shareholders in year $1?$

$4.$ In Policy III, what is the dividend$/$share you can pay the shareholders in year $2?$

$5.$ What is the stock price for Policy III?

$6.$ When taking into account flotation costs, you should recommend that your firm should not go with which policy $[$I$,$ II$,$ or III$]?$