1. a) Red sea industries will pay a regular dividend of $1.9 per share for the next four years. At the end of the four year, the company will also pay out a $50 per share liquidating dividend, the company will cease operations. If the discount rate is 10 percent, what is the current value of the company stock?

b) in the previous problem, suppose the current per share is $80. If all other information remains the same, what must the liquidating dividend be?

2. Could I industries just paid a dividend of $2.10 per share. The dividend are expected to grow at a 22 percent rate for next five years and then level off at 8 percent growth rate indefinitely. If the required return if 12 percent, what is the value stock today?