contestada

You own 1,800 shares of stock in Avondale Corporation. You will receive a $1.60 per share dividend in one year. In two years, the company will pay a liquidating dividend of $66 per share. The required return on the company's stock is 14 percent. Suppose you want only $600 total in dividends the first year. What will your homemade dividend be in two years

Respuesta :

Chrisnando

Answer:

$121,399.08

Explanation:

Given:

•Shares of stock= 1800

• yearly per share dividend = $1.60

• Liquidating dividend per share = $66

• Required return on stock = 14℅

•Dividend required by me = $600

Let's solve for the following:

•Dividend received in one year = 1800 × 1.60 = $2,880

•For price of stock in one year, we have:

$66/1.14 = $57.895

•We now need to find the number of shares purchased,

($2880-$600)/57.896 =

39.38shares

Therefore, dividend in two years will be:

$66 (1800+39.38) = $121,399.08

Otras preguntas