Water Limited, a small, unquoted company. The shares of Western Utilities are currently trading at 510p and there are 50 million shares outstanding. Somerset Water has 8,000 shares outstanding with a face value of 1.

The financial director of Western Utilities estimates that given Somerset Water's smaller size and other factors, investors would require 130% of the return they require from Western Utilities.

The following table reports the total amount of dividends paid by both companies: