The Canadian T-bill is yielding 0.26% while the 10 year Government bond is yielding 1.3% and the average corporate bond is yielding 1.9% You own stock in 1Shot Inc. a. You are certain that the company will issue a liquidating dividend of $4.00 per share in 1 year with no other dividends to be paid before or after. A liquidating dividend is paid when a company sells its assets, pays its debts, and distributes the remainder as a liquidating dividend when the company is closing down. 

a. What do you think this company’s stock is worth today?

 b. How would your answer change if you were less certain about the amount of the liquidating dividend, but still certain that the company would be wound up in 1 year? 

c. What would you value a share of the company’s stock if you believed that it would issue a $4 dividend next year, a $6 dividend the year after, and a liquidating dividend of $45 the year after?