Q1. The balance sheet for Firth Group is provided below in market value terms. There are 12,000 shares outstanding The company has declared a dividend of $1.9 per share. The stock goes ex dividend tomorrow. Assume zero tax rate. Answer the following questions. a) What is the stock price selling today? Total dividends = Number of shares Dividend per share =12,000$1.9=$22,800. Equity after dividend = Total equity - Total dividends =$503,000$22,800=$480,200. Stock price today = Total equity / Number of shares =$503,000/12,000=$41.92 approximately. b) What is the stock price selling tomorrow? Stock price tomorrow = Stock price today - Dividend per share =$41.92$1.9=$40.02 approximately. c) If the dividend tax rate is 10% and there is no capital gain tax, is the stock pricing selling tomorrow greater, lower, or equal to the answer you got in b)? Why? After-tax dividend per share = Dividend per share (1 tax rate )=$1.9(10.10)= $1.71. Stock price tomorrow = Stock price today - After-tax dividend per share =$41.92$1.71= $40.21 per share Q2. In Q1, suppose the company gives up the cash dividend plan because of shareholder opposition. Instead, the company decides to buyback $22,800 worth of stock. a) How many shares will be repurchased? b) What will the price per share be after the repurchase according to MM model