Mr. Toriop owns 5,000 shares of stock in Yummy Corporation. The company has announced that it will pay a dividend of $5 per share in one year and a liquidating dividend of $50 per share in two years. The required return on Yummy stock is 12%

. a. What is the current share price of your stock? (1 mark) =44.32

b. What will be the companys share price in one years time? (1 mark)=44.64

c. Mr. Toriop wishes to have equal amounts of dividend income for the next two years. How can he use homemade dividends to achieve this goal? Check that the present value of the cash flows will be the same as it is before the homemade dividends. (Hint: Dividends will be in the form of an annuity.) (8 marks)

** It is NOT looking for the 26.22 from Excel or the Calculator, 8 marks is a clear was to see that**

d. Suppose Mr. Toriop is thinking about buying a house for $220,000 in one year. How can he use homemade dividends to achieve this goal? Check that the present value of the cash flows will be the same as it is before the homemade dividends. (5 marks)

**The part in bold is what confuses me, how do I prove this*

e. Suppose Mr. Toriop is thinking about postponing the house purchase for two years, by which time the price of the house will have increased by $46,800. How can he use homemade dividends to achieve this goal? Check that the present value of the cash flows will be the same as it is before the homemade dividends.

**Again I do not know how to check the part in bold

So c,d and e is what I need help with and please DO NOT use a calculator or Excel