QUESTION 1 (25 MARKS) a. American shoes cooperation just announced that it will slash its dividend from RM4 to RM2.50 per share and use the extra funds to expand. Prior to the announcement, the Cooperation's dividends were expected to grow at a rate of 3%, and its share price was RM50. With the new expansion, the Cooperation's dividends are expected to grow at a 5% rate. Please calculate the share price which you expect after the announcement. (Assume the Cooperation's risk is unchanged by the new expansion.) is the expansion a positive NPV investment? (12 marks) b. Olivera is expected to pay an annual dividend of $0.65 after one year. Experts expect this dividend to grow at 12% per year thereafter until the fifth year. After then, growth will level off at 2% per year. According to the dividend-discount model, calculate the value of a share of Olivera stock if the firm's equity cost of capital is 8% (13 marks)