JJ Industries will pay a regular dividend of $1.30 per share for each of the nex
ID: 2613335 • Letter: J
Question
JJ Industries will pay a regular dividend of $1.30 per share for each of the next four years. At the end of the four years, the company will also pay out a $44 per share liquidating dividend, and the company will cease operations. If the discount rate is 7 percent, what is the current value of the company’s stock? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
JJ Industries will pay a regular dividend of $1.30 per share for each of the next four years. At the end of the four years, the company will also pay out a $44 per share liquidating dividend, and the company will cease operations. If the discount rate is 7 percent, what is the current value of the company’s stock? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Explanation / Answer
Year Dividend Present value 1 1.3 1.214953271 2 1.3 1.135470347 3 1.3 1.06118724 4 45.3 34.55915311 Current value 37.97
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