Kokako Ltd has had a long-term growth rate of 5% and expects that this will continue for another two years or so, although there is a chance of an economic rough patch in that timeframe. After that, new patent-protected technology that Kokako Ltd is secretly developing should increase growth to about 8%. with future after-tax earnings sustainable at this new higher level To complicate things, this years net profit after tax is going to be double what it could be expected to be in any ordinary year, while the firms investment requirements will remain unchanged. Last year, Kokako Ltd paid its first annual dividend. Required: (i) Explain in a short paragraph what kind of dividend policy this firm should maintain if its management heeds the findings of Lintner (1956). (4 marks) (ii) Again, in terms of Linters (1956) findings, explain (in a sentence or so) one pitfall that Kokako Ltd should avoid and explain why it should be avoided. (2 marks) (b) Piccolo Ltd is planning on paying a dividend of $4.00 per share. The cum-div price of a Piccolo share is $35 and this falls to $32.20 on the ex-div day. Investors face a tax rate of 40% on dividend income and a tax rate of 25% on capital gains and the cost of equity with respect to Piccolo is 12%. Required: How long (in years to two decimal places) do Piccolo Ltds investors hold on to their shares, on average, before collecting their capital gains?