Question

Ancient Industries just paid a dividend of $1.03 a share. The company announced today that it expects to pay $.90 a share next year and a final liquidating dividend of $18.44 in two years. What is one share of this stock worth today if the required rate of return is 16 percent

Answer 1

$14.48

Step-by-step explanation:

P0 = $.90 / 1.16 + $18.44 / 1.16^2 = $14.48

One share of this stock worth today if the required rate of return is 16 percent is $14.48