Condition 2:Divo is 11,000 $1,000 bonds are issued (re=10%) Date 0 Date 1 Aggregate Div to Old stockholders $11,000 $8,900 Payment to the debt 0 1,100 Value per share=11+8.9/(1+10%)=19.09 slide 10slide 10 Condition 2: Div Condition 2: Div0 is 11,000 & $1,000 is 11,000 & $1,000 bonds are issued ( bonds are issued ( r B=10%) Date 0 Date 1 Aggregate Div to Old stockholders $11,000 $8,900 Payment to the debt 0 1,100 Value per share = 11 + 8.9/(1+10%) =19.09