Grenouille Properties. Grenouille Properties (U.S.) expects to receive cash dividends from a French joint venture over the coming three years. The first dividend, to be paid in one year, is expected to be euro 760,000. The dividend is then expected to grow 9.9% per year over the following two years. The current exchange rate is $1.3844/. Grenouille's weighted average cost of capital is 10%.

a. What is the present value of the expected dividend stream if the euro is expected to appreciate 4.10% per annum against the dollar?

b. What is the present value of the expected dividend stream if the euro were to depreciate 2.80% per annum against the dollar?