You own 300 shares of Abco,Inc. stock. The company has stated that it plans on issuing a dividend of $.60 a share one year from today and then issuing a final liquidating dividend of $2.20 a share two years from today. Your required rate of return is 9%. Ignoring taxes,what is the value of one share of this stock today?
A) $2.36
B) $2.40
C) $2.62
D) $2.80
E) $2.85
Correct Answer:
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