Final answer:
To calculate what an investor would pay for a share of stock in Babble, Inc., one would need to discount the expected future dividends back to their present value using a discount rate, sum these present values, and divide by the number of shares. The keywords are dividends, discount rate, and present value.
Step-by-step explanation:
The question pertains to the valuation of a company's shares based on expected dividend payouts over a specific timeline. An investor would calculate the present value of the forthcoming dividends that Babble, Inc. is expected to pay before it is disbanded. To determine what an investor would pay for a share of stock in Babble, Inc., one would divide the present value (PV) of total expected profits by the number of shares. Assuming the profits are $15 million, $20 million, and $25 million for the first, second, and final year respectively, the following present value calculations would be made for each year's dividend, discounted by the appropriate discount rate reflective of the investment risk (not provided in the provided info).
Once the present value of each year's profit is determined, these values are summed up to obtain the total present value of all dividends. This sum is then divided by the total number of shares, in this case, 200 shares, to ascertain the price per share an investor might be willing to pay for Babble, Inc.
However, without an actual discount rate provided, it is not possible to complete the calculation as that is a critical element in discounting future cash flows to their present values.