12. Payout policy in perfect capital markets (S15.2) Go back to the first Rational Demiconductor balance sheet one more time. Assume that Rational does not win the lawsuit (see Problem 11)

and is left with only $1 million in surplus cash. Nevertheless, Rational decides to pay a cash dividend of $2 per share. What must Rational do to finance the $2 dividend if it holds its debt and investment policies constant? What happens to price per share?