1. Portman Industries just paid a dividend of $2.16 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 12% over the next year. After the next year, though, Portman's dividend is expected to grow at a constant rate of 2.40% per year. The risk-free rate is 3.00%, the market risk premium is 3.60%, and Portman's beta is 1.90. Assuming the market is equilibrium, use the information just given to find :

Term	Value
Dividends one year from now (D1)	2.4192
Horizon Value	9.84
Intrinsic value of portmans stock	30.32

1. What is the expected dividend yield for Portman's stock today?

a. 7.98%

b. 5.95

c. 7.26%

d. 7.44%

2. Portman has 800,000 shares outstanding, and Judy Davis, an investor, holds 12,000 shares at the current price as just found. Suppose Portman is considering issuing 100,000 new shares at a price of $27.64 per share. If the new shares are sold to outside investors, by how much will Judy's investment in Portman be diluted on a per-share basis?

a. $1.13 per share

b. $0.54 per share

c. $0.46 per share

d. $0.66 per share

4. Thus Judys investment will be diluted, and Judy will experience a total _profit or loss_ of ________.

a. $4212

b. $4860

c. $6480

d. $7776

Please show how you arrived to the answer. Thanks!