You own 100 shares of MXR stock.The company plans on issuing a dividend of $.50 a share one year from today,$.85 a share two years from today,and then a final liquidating dividend of $12.60 a share three years from today.Your required rate of return on this stock is 16 percent.Ignoring taxes,what is the value of one share of this stock to you today?

Question

Quizplus · Accepted Answer

Value per share = ($.50/1.16)+ ($.85/1.16²)+ ($12.60/1.16³)= $9.14

You Own 100 Shares of MXR Stock