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I NEED AN ANSWER QUICK Please show all your work. You own one share in Lhasa Mining (LM). Every period LM has a 13 percent
I NEED AN ANSWER QUICK
Please show all your work.
You own one share in Lhasa Mining (LM). Every period LM has a 13 percent chance of going bankrupt. If it survives the first period, it pays a dividend of 20. If it survives the second period, it has a dividend of 18. If it survives the third period, it has a dividend of 15. If it survives the fourth period, it has dividend of 12, and then disappears. Using the efficient markets hypothesis, what is the value of LM at the start of Period 1? I got LM is valued at $48.776 or $48.78.
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