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You own 1,000 shares of stock in Dale Co. You will receive a 95-cent per share dividend in one year. In two years, Dale will
You own 1,000 shares of stock in Dale Co. You will receive a 95-cent per share dividend in one year. In two years, Dale will pay a liquidating dividend of $45 per share. The required return on Dale stock is 14% What is the current share price of your stock (ignoring taxes)?
If you would rather have equal dividends on each of the next two years, show how you can accomplish this by creating homemade dividends.
Suppose now you want only $500 total in dividends the first year. What will your homemade dividend be in two years?
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