10. The net income of Kopka Financial Corporation (KFC) is $345,000. The company has 25,000 outstanding shares and a 100 percent payout policy. The expected value of the firm one year from now is $4.185 million. The appropriate discount rate for the company is 13 percent and the dividend tax rate is zero.
A. Calculate the current value of Kopka Financial Corporation (KFC) assuming the current dividend has not yet been paid.
B. What is the ex-dividend price of KFC's stock if the board follows its current policy?