(Solution) - You own 1 000 shares of stock in Avondale Corporation You -(2025 Original AI-Free Solution)

Discipline:

Type of Paper:

Academic Level: Undergrad. (yrs 3-4)

Paper Format: APA

Pages: 5 Words: 1375

Download Solution ($11.00) Write My Paper Afresh

Buy For $11.00

Paper Details

You own 1,000 shares of stock in Avondale Corporation. You will receive a $2.30 per share dividend in one year. In two years, Avondale will pay a liquidating dividend of $53 per share. The required return on Avondale stock is 15 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.