General Stores recently announced that it will pay annual dividends of $1.05,$.80,and $.50 over the next 3 years,respectively.The following year,the firm will close and pay a final dividend of $11.30 a share.What is one share of this stock worth today at a discount rate of 16.6 percent?

Question

Quizplus · Accepted Answer

P₀ = $1.05 / 1.166 + $0.80 / 1.166² + $0.50 / 1.166³ + $11.30 / 1.166⁴ = $7.92

General Stores Recently Announced That It Will Pay Annual Dividends