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Please show the calculation in excel. You own 1,100 shares of stock in Avondale Corporation. You will receive a dividend of $2.40 per share in
Please show the calculation in excel.
You own 1,100 shares of stock in Avondale Corporation. You will receive a dividend of $2.40 per share in one year. In two years, the company will pay a liquidating dividend of $72 per share. The required return on the company's stock is 20 percent. |
a. | Ignoring taxes, what is the current share price of your stock? |
b. | If you would rather have equal dividends in each of the next two years, how many shares would you sell in one year? |
c. | What would your cash flow be for each year for the next two years if you create equal homemade dividends? Hint: Dividends will be in the form of an annuity. |
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