Final answer:
To find the current value per share with a required rate of return of 17%, one would typically use the dividend discount model or discounted cash flow model, adjusting future cash flows to present value using the 17% rate. The formula involves dividing the present discounted value of total profits by the number of shares. The given numbers must be adjusted for the 17% rate to provide an accurate current stock value.
Step-by-step explanation:
To calculate the current value per share of a stock when the required rate of return is 17%, you would typically look at the expected future payments from the stock, such as dividends and the expected selling price, and discount them back to the present using the required rate of return. Typically, the dividend discount model (DDM) or discounted cash flow (DCF) model is used for such computations.
However, the provided information mentions a present value calculation where the total profits are already discounted at 15%, which is not the same as the required rate of return of 17% mentioned in the question. To get the current stock value per share, you divide the present discounted value (PDV) of total profits by the number of shares. If the PDV of total profits was, for example, $51.3 million and there were 200 shares, the calculation would be $51.3 million divided by 200, resulting in a value of $256,500 per share. However, it is important to adjust the calculations based on the accurate required rate of return, which in this case is 17%.
To properly determine the current stock value, one must have additional details like the expected future cash flows (dividends and final sale price), and the precise number of shares outstanding. Adjusting the calculations for a 17% required rate of return would provide the accurate current value per share. Keep in mind that in practice, these are estimated figures and actual market conditions can lead to different outcomes.