The board of directors of Moon plc decided at present (year 0) to dissolve the company in two years (year 2). The company has 20,000 shares in circulation and the cost of capital is 9 percent. This is an all-equity firm and the Chief Financial Officer knows with certainty the future cash flows. The company expects to receive $10,600 in year 1 and another $108,000 in year 2. All cash flows received by the company will be distributed as dividends.

Calculate the current share price ignoring taxes. Suppose you own 200 shares in Moon plc and your preference is to have equal dividends in year 1 and year 2. Explain how you can achieve this by creating homemade dividends. Show how your desired position can be achieved. Calculate the present value of your cash flow under the original scenario and also the case of equal dividends