You own 2,000 shares of equity in Avondale Property plc. You will receive a 0.25 per share
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You own 2,000 shares of equity in Avondale Property plc. You will receive a £0.25 per share dividend in one year. In 2 years, Avondale will pay a liquidating dividend of £0.75 per share. The required return on Avondale shares is 18 per cent. What is the current share price of your equity (ignoring taxes)? If you would rather have equal dividends in each of the next 2 years, show how you can accomplish this by creating homemade dividends.
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Related Book For
Corporate Finance
ISBN: 9780077173630
3rd Edition
Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe
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