During the first months of the year, John heard the company made the following operations that may affect the situation of the ownership of the company:

On 24 of January the company decided a 10% stock dividend distribution to its stockholders on record at 25^st of February, to be paid on 15 of March. The market value of the shares was estimated to 10 per share on 24 of January.

On 1st of March the company purchased 200.000 of its owns shared at a price of 10 per share

In order to invest in a new project, the company decided to increase its financing issuing on 4^th of April 1,000,000 preferred stock with a 15 face value. Said preferred stock will offer a 20% cumulative dividend.

On 1^st of May, the company reissued 50% of the stocks purchased on 1^st of March at a price per share of 12.

The forecast presented by the board of the company during the last stockholders meeting showed the following perspectives of net income taking into account the new projects to be carried on in 2020.

Empire's Investments Ltd
Net Income forecast
Year	Net Income	Div/ share
2020	120.000,00	0,06
2021	350.000,00	0,18
2022	12.200.000,00	6,10
Total	12.670.000,00	6,34
Average / Year		2,11

1. Assuming the forecast prepared by the directors of the company is correct regarding the net income, would the cash dividends to be expected remain the same taking into account the different movements described below? Calculate the amount of cash dividend payment per share of common stock to be expected at the end of the years 2020, 2021 and 2022. ? Justify your answers and calculations. (25 points)
2. Instead of issuing preferred stock on 4^th of April, the company had the possibility to issues 15,000 of 8% Bonds of 1,000 face value. Calculate the earning per share of common stock considering the company would have issued the bond instead of the preferred stock (explain your calculation). Do you agree with the board of Directors choice for the preferred stocks? (Justify your answer). (25 points)

Empires vestments Ltd Balance sheet 1 of January 2020 Assets Cash Land Buildings Acc depr Building 2.005.000,00 200.000,00 1.200.000,00 -200.000,00 Real Estate Available for sale Construction in progress Total assets 2.500.000,00 2.300.000,00 8.005.000,00 Liabilities Long term note payable Accounts payable 3.250.000,00 1.000.000,00 2.250.000,00 Owner's Equity 4.755.000,00 Capital stock (4.000.000 shares with 1$ par value) 2.000.000,00 Retained earnings 2.755.000,00 Total Liabilities + Owners Equity 8.005.000,00 Empires vestments Ltd Balance sheet 1 of January 2020 Assets Cash Land Buildings Acc depr Building 2.005.000,00 200.000,00 1.200.000,00 -200.000,00 Real Estate Available for sale Construction in progress Total assets 2.500.000,00 2.300.000,00 8.005.000,00 Liabilities Long term note payable Accounts payable 3.250.000,00 1.000.000,00 2.250.000,00 Owner's Equity 4.755.000,00 Capital stock (4.000.000 shares with 1$ par value) 2.000.000,00 Retained earnings 2.755.000,00 Total Liabilities + Owners Equity 8.005.000,00