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Question 2 (50 marks) You own 2,000 shares of stock in JCC Corporation. You will receive a $7.36 per share dividend in one year. In
Question 2 (50 marks) You own 2,000 shares of stock in JCC Corporation. You will receive a $7.36 per share dividend in one year. In two years, the company will pay a liquidating dividend of $65 per share. The required return on the company's stock is 10 percent. Required: a. Determine the current price of your stock (ignoring taxes). (6 marks) b. If you would rather have equal dividends in each of the next two years, show how you can accomplish this by creating homemade dividends. (24 marks) c. Use this case to illustrate the irrelevance of dividend policy. (20 marks)
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