You own 100 shares of the stock of unlevered Siena company which has 1,000 shares outstanding. Siena plans to pay $4,600 dividend at the end of the current year (i.e. at the end of one year from today) and a liquidating dividend of $10,580 at the end of 2 years from today. The required (expected) return on Siena's stock is 15%. lgnoring personal taxes and transaction costs:

a) What will be the value of your shares of stocks?

b) Suppose shareholders want Siena to increase its $4,600 dividend payout at the end of the current year by $1,886 and Siena finances this increase by issuing new stock of value $1,886 at the end of the current year.

What will be the value of your shares under this scenario?

c) How many new shares will be issued to the new stockholders at the end of the current year?

d) Suppose Siena does not increase its $4,600 dividend payout at the end of the current year by issuing new stock of value $1,886 at the end of the current yearHow would you then create home-made dividends to increase your dividend at the end of the current year?

e) Would your creation of home-made dividends in d) above increase the value of your shares?