2. (6 points) Alpha Corporation has just paid its annual dividend and is looking forward to another successful year ahead. The company had free cash flow for the year just ended of $10 billion, all of which it just paid out to its shareholders as a dividend. Right now, shareholders do not believe that Alpha has any growth opportunities, so they expect the annual cash flow and dividend stream to remain unchanged for the foreseeable future. Alpha has 1 billion shares outstanding. The company is entirely equity-financed. The cost of equity for the company is estimated to be 10%. The capital market is efficient and there is no tax. A. What is the current stock price, PO? a. $90 b. $120 c. $110 d. $100 2. (6 points) Alpha Corporation has just paid its annual dividend and is looking forward to another successful year ahead. The company had free cash flow for the year just ended of $10 billion, all of which it just paid out to its shareholders as a dividend. Right now, shareholders do not believe that Alpha has any growth opportunities, so they expect the annual cash flow and dividend stream to remain unchanged for the foreseeable future. Alpha has 1 billion shares outstanding. The company is entirely equity-financed. The cost of equity for the company is estimated to be 10%. The capital market is efficient and there is no tax. A. What is the current stock price, PO? a. $90 b. $120 c. $110 d. $100 B. One year later when it comes for time for next dividend, What would be the price right before the the ex-dividend date? What would be the divided amount? What would be the price at the ex-dividend date? a. $100, $10, $110 b. $100, $10, $100 c. $100, $1, $100 d. $90, $10, $90