13. a) The net income of Tango Plc is 64,000. The company has 20,000 shares outstanding and a 100 per cent dividend payout policy. The expected value of the firm one year from now is 3,091,200. The appropriate discount rate for Tango is 12 percent and the dividend tax rate is zero. i. What is the current value of the firm assuming the current dividend has not yet been paid? (10 marks) ii. What is the ex-dividend price of Tango's equity if the board follows its current policy? (15 marks) iii. At the dividend declaration meeting, several board members argued that the dividend is too small and is probably depressing Tango's share price. They have proposed that Tango sells enough new shares to finance a 8.50 dividend. Show how this new dividend will impact on the share price. (35 marks) b) Critically examine the merits and demerits of a stable dividend policy. (40marks)