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5 August, 22:32

plans to pay dividends of $1.36, $1.15, $1.35, and $.40 at the end of the next four years, respectively. After that, the company will be sold and shareholders are expected to receive $82.40 per share in Year 6 when the sale should be finalized. If the required return is 11.4 percent, what is the current value of one share of this stock

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  1. 5 August, 23:00
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    MV=$46.5

    Explanation:

    MV=D1 / (Ke-g)

    Mv=1.15 / (.114-0.089)

    MV=46.5

    Where MV=?

    Ke=11.4%

    g=8.95% it calculated by discounting all dividends with Ke

    D1=1.15
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Home » Business » plans to pay dividends of $1.36, $1.15, $1.35, and $.40 at the end of the next four years, respectively. After that, the company will be sold and shareholders are expected to receive $82.40 per share in Year 6 when the sale should be finalized.
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