You are comparing the dividend policies of three dividend-paying firms in Australia (company tax rate is 30%). You have collected the following information on the ex-dividend behaviour of these firms.

Urban Water	QD Energy	NW Hydro
Cum-dividend price	60	70	105
Ex-dividend price	56	66.5	98.5
Fully franked Dividends per share	3	3	5

a. What are the associated franking credits for three companies at the given franked dividends? (1.5 marks)

b. How much does the market value the associated franking credits (a.k.a. , keeping two digits, eg. 0.15)? (1.5 marks)

c. If you were a tax-exempt Australian domestic investor, which company would you use to make dividend arbitrage profits? How would you go about doing so? (2 marks)