1. Your all-equity firm has beta of 2.0 and a free cash flow today of $10M. The firm is expected to produce a perpetual free cash flow of $12M per year starting next year, that grow at rate of 1 percent per year. Assume a risk free rate of 3.0 percent and an expected market risk premium of 6.0 percent. Your firm has 7M shares outstanding.

   In order to issue a one-time dividend of $35M, your firm issues $25M worth of shares. What is the ex-dividend price per share of your firm?

   		5.79
   		9.71
   		7.52