Problemyou own 2200 shares of deltona hardware the company, Ask an Expert

Accounting

Problem:

You own 2,200 shares of Deltona Hardware. The company has stated that it plans on issuing a dividend of $0.42 a share at the end of this year and then issuing a final liquidating dividend of $2.90 a share at the end of next year. Your required rate of return on this security is 16 percent.

Required

Ignoring taxes, what is the value of one share of this stock to you today?

A. $2.30
B. $2.43
C. $2.52
D. $2.92
E. $3.32

Note: Show supporting computations in good form.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91171280

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