a) Anle Corporation has a current price of $50 and will pay a $2 dividend in one year. The expected price after paying that dividend is $54. i. What is expected dividend yield? ii. What is expected capital gain rate? iii. What is equity cost of capital?

(b) Suppose the company decides to pay a dividend of $2 per year and plans to continue this payment indefinitely. If the equity cost of capital is 10%, what is the price per share?

(c) Suppose the company chooses to pay a dividend of $2 per year and expects this dividend to grow at a rate of 2%. If the equity cost of capital is 10%, what is the price per share?

(d) Suppose the company intends to pay a constant dividend of $2 for the first 5 years and then increase the dividend by 2% starting from year 6. If the equity cost of capital is 10%, what is the price per share?

(e) Suppose that in January 2006, Kenneth Cole Productions had EPS of $1.65, sales of $518 million, EBITDA of $55.6 million, excess cash of $100 million, $3 million of debt, and 21 million shares outstanding. Suppose that Tommy Hilfiger Corporation has an enterprise value to EBITDA multiple of 7.19 and a P/E multiple of 17.2. What share price would you estimate for KCP using each of these multiples?