Little OIl has $1$ million shares outstanding with a total market value of $$20$ million. The firm is expected to pay $$1$ million of dividends

next year, and thereafter the amount paid out is expected to grow by $5\%$ a year In perpetulty. Thus the expected dividend is $$1\mathrm{.}05$

million In year $2,$$$1\mathrm{.}1025$ million In year $3,$ and so on$.$ However, the company has heard that the value of a share depends on the flow of

dividends, and therefore it announces that next year's dividend will be Increased to $$2$ million and that the extra cash will be ralsed

Immedlately afterwards by an issue of shares. After that, the total amount pald out each year will be as prevlously forecasted, that is$,$

$$1\mathrm{.}05$ million In year $2$ and increasing by $5\%$ in each subsequent year.

a$.$ At what price will the new shares be issued in year $1?($Do not round intermediate calculations. Round your answer to the nearest

whole number.$)$

b$.$ How many shares will the firm need to Issue? $($Do not round intermedlate calculations. Round your answer to the nearest whole

number.$)$

c$-1.$ What will be the expected dividend payments on the new shares after year $1?($Do not round intermediate calculations. Enter

your answer in dollars not in millions. Round your answer to the nearest whole number.$)$

c$-2.$ What will be paid out to the old shareholders after year $1?($Do not round intermedlate calculations. Enter your answer in millions

not in dollars. Round your answer to the nearest whole number.$)$

d$-1.$ What is the present value of the cash flows to current shareholders under the revised dividend policy? $($Do not round

Intermediate calculations. Enter your answer in millions not in dollars. Round your answer to the nearest whole number.$)$

d$-2.$ Did the change In the dividend policy affect the present value of the cash flows to current shareholders?