Alpha Corporation has $20 Million in Retained Earnings. It has the following equity capital structure:

8% Preferred Stock $25,000,000

5% Cumulative Preferred Stock $50,000,000

Common Stock (5 Million Shares) $200,000,000

1. What is the Book Value per Share of the Common Stock of Alpha Corporation?

2. It has not paid any dividends in two years and wants to keep $10 Million in Retained Earnings after paying its common dividend. What is the maximum common dividend it can pay?

a. $2.00 per share

b. $1.60 per share

c. $1.10 per share

d. $0.60 per share ?

3. What is the Book Dividend Yield if Alpha decides to pay a common dividend of $0.40 per share?

4. Using the dividend growth model, what is the approximate Market Value of a common share, if Alpha pays a common dividend of $0.40 per share, and dividend growth is expected to be 10%, and the required return for Alpha common stock is 12%?

a. $40 per share

b. $45 per share

c. $50 per share

d. $55 per share