15. Bestbuy Auto Ltd. has outstanding 1,20,000 shares selling at `20 per share. The company hopes to make a Net Income of `3,50,000 during the year ended 31st March 2005. The company is considering paying a dividend of `2 per share at the end of the current year.

The capitalisation rate for the risk class of the company has been estimated to be 15%.

Assuming no taxes, answer the questions listed below on the basis of the M-M Dividend Valuation Model:

(i) What will be the price of the share at the end of the year

(a) if dividend is paid and

(b) dividend is not paid?

(ii) How many new shares must the company issue if the dividend is paid and the company needs `740000 for an approved investment expenditure during the year?