You own 1,000 shares of stock in Kiessling Corporation. You will receive a 60-cent per share dividend

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You own 1,000 shares of stock in Kiessling Corporation. You will receive a 60-cent per share dividend in one year. In two years, Kiessling will pay a liquidating dividend of $30 per share. The required return on Kiessling stock is 15 percent. What is the current share price of your stock (ignoring taxes)? If you would rather have equal dividends in each of the next two years, show how you can accomplish this by creating homemade dividends.

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Fundamentals Of Corporate Finance

ISBN: 9780072553079

6th Edition

Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan

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