Part A We Are Life Limited (WALL) has done it again by creating a vaccine for the novel corona virus. WALL is expected to pay a divideend of $2.45 next year after which dividends should enjoy growth...

Part A

We Are Life Limited (WALL) has done it again by creating a vaccine for the novel corona virus. WALL is expected to pay a divideend of $2.45 next year after which dividends should enjoy growth of 15% for 2 years. Dividend growth is then expected to fall to 7% for 1 year before settling at a constant growth of 4% for the foreseeable future. The cost of capital is 24%.

i)Calcuate WALL's share price today (P₀)_.

ii)Calculate the expected share price three years from today (P₃).

ii)Calculate the dividend yield for year 4.

PART B

Cohen and Company Limited (CAC) has three preferred stocks on the market, each with a par value of $90. The stocks has dividends and yield as presented in the table below.

Name               Dividends      yield

Series X                  8.0%           10.5%

Series Y                   7.2%            9.8%

Series 2                   6.5%             11.1%