ABC company has $50 million in excess cash and no debt. The firm expects to generate additional free cash flows of $40 million per year in subsequent years and will pay out these future free cash flows as regular dividends. The firms unlevered cost of capital is 10% and there are 10 million shares outstanding. The board is meeting today to decide whether to pay out its $50 million in excess cash as a special dividend or to use it to repurchase shares.

1. Including its cash, what is Kyoto Technologies' total market value?

2. Assume that the firm uses the entire excess cash to pay a special dividend. What is the amount of the special dividend per share?

3. If the firm used the entire excess cash to pay a special dividend, what will be the ex-dividend share price?

4. Assume that the firm uses the entire excess cash to repurchase its shares. What will be the amount of regular yearly dividends in the future?