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You own 1,000 shares of stock in Caesers Corporation. You will receive a $4.20 per share dividend in one year. In two years, Caesers Corporation

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You own 1,000 shares of stock in Caesers Corporation. You will receive a $4.20 per share dividend in one year. In two years, Caesers Corporation will pay a liquidating dividend of $50 per share. The required return on Caesers stock is 12 percent. What is the current share price of your stock (ignoring taxes)? If you would rather have equal dividends in each of the next two years, show how you can accomplish this by creating homemade dividends. Discuss your result. Input Area: Share Owned Dividends Next Year Liquidating Dividends Required Rate of Return 1,000 $4.20 $50.00 12.0096 Output Area: Homemade DividendsQuestion PO Two Equal dividends P1 Cash Flow Required in Year 1 |||00000 Dividends Received in Year 1 Year 1 Shares to be sold to Raise Required Cash Shares Remaining at the end of Year 1 Year 2 cash flow from Liquidating dividends Discuss your result in the space provided below

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