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Suppose that Wharton is an all-equity firm that has existed for 10 years. The current financial managers plan to dissolve the firm in four years.
Suppose that Wharton is an all-equity firm that has existed for 10 years. The current financial managers plan to dissolve the firm in four years. The total cash flows the firm will generate, including the proceeds from liquidation, will be $120207 in each of the next four years. At the present time, dividends at each date are set equal to the cash flow of $120207. There are 1000 shares outstanding. Assuming a 14 percent required return, Find out the value of a share of stock today (share price)?
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