Atlantic Properties (U.S.) expects to receive cash dividends from a French joint venture over the coming

three years. The first dividend, to be paid December 31, 2002, is expected to be 720,000. The

dividend is then expected to grow 10.0% per year over the following two years. The current exchange

mate (December 30, 2001) is $1.25/. Atlantie's weiphted average cost of capital is 12%

What is the present value of the expected euro dividend stream if the euro is expected to

appreciate 4.00% per annum against the dollar? (10) marks)

What is the present value of the expected dividend stream if the euro were to depreciate 3.00%

per annum against the dollar?