The ECN Corporation is an all equity firm and its current financial manager plan to dissolve the firm in two years. The corporation has announced that it will pay $0.6 per share dividend to shareholders in one year. In two years, ECN will pay a liquidating dividend of $60 per share. The required return on ECN stock is 18%. Lily owns 10,000 shares in the company.

1. What will Lilys dividend income be this year if she uses homemade dividends to create two equal annual dividend payments (6 marks)
2. What will Lilys dividend income be in year two if she only wants $ 1,500 total in dividend in year one. (14 marks)