1.You own 1,100 shares of stock in Armstrong Corporation. You will receive a $2.60 per share dividend in one year. In two years, Armstrong will pay a liquidating dividend of $48 per share. The required return on Armstrong stock is 20 percent. Suppose you want only $800 total in dividends the first year. What will your homemade dividend be in two years?

2.You own 1,000 shares of stock in Armstrong Corporation. You will receive a $1.85 per share dividend in one year. In two years, Armstrong will pay a liquidating dividend of $58 per share. The required return on Armstrong stock is 15 percent.

Ignoring taxes, what is the current share price of your stock? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

If you would rather have equal dividends in each of the next two years, how many shares would you sell in one year? (Do not round intermediate calculations. Round your answer to the nearest whole number. (e.g., 32))

What would your cash flow be for each year for the next two years? Hint: Dividends will be in the form of an annuity. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

3.

The statement of financial position for Knox Corp. is shown here in market value terms. There are 8,000 shares of stock outstanding.

Market Value Statement of Financial Position?

Cash$44,400 Equity$424,400

Fixed assets 380,000

Total$424,400 Total$424,400

Instead of a dividend of $1.20 per share, the company has announced a share repurchase of $9,600 worth of stock.

How many shares will be outstanding after the repurchase?

What will the price per share be after the repurchase?