Consolidated Pasta is currently expected to pay annual dividends of $10 a share in perpetuity on the 2.2 million shares that are outstanding. Shareholders require a 8% rate of return from Consolidated stock.

A. What is the price of Consolidated stock?

Note: Do not round intermediate calculations.

B. What is the total market value of its equity?

Note: Enter your answer in millions.

Consolidated now decides to increase next year's dividend to $20 a share, without changing its investment or borrowing plans. Thereafter the company will revert to its policy of distributing $10 million a year.

C. How much new equity capital will the company need to raise to finance the extra dividend payment?

Note: Enter your answer in millions.

D. What will be the total present value of dividends paid each year on the new shares that the company will need to issue?

Note: Enter your answer in millions.

E. What will be the transfer of value from the old shareholders to the new shareholders?

Note: Enter your answer in millions.

F. Is this figure more than, less than, or the same as the extra dividend that the old shareholders will receive?