a) GSK has a historical dividend payout of 0.50 per year. For the current year GSK will pay a dividend of 0.50 and that this will grow thereafter by 5 percent per annum in perpetuity. If the relevant discount rate is 10 percent, how much should you pay for GSK equity?

b)

Given a capital constrained environment (capital ratioing in force) select the optimum investment from the table below and justify your selection.

Project	NPV	Profitability Index
Ritz	2 million	1.10
Wyndham	10 million	1.01
InterCon	4 million	1.30