Shares of Exem Radiator Limited (ERL), a government controlled company, currently sell for $45 00 on the Toronto Stock Exchange ERL pays an annual dividend of $8 00 per share at year end Government scientists have announced a breakthrough that they say will make radiators obsolete in 10 years, at w...

Yes it still makes sense to buy shares in Exem Rad ...

Shares of Exem Radiator Limited (ERL), a government-controlled company, currently sell for $45.00 on the Toronto Stock

Question:

Shares of Exem Radiator Limited (ERL), a government-controlled company, currently sell for $45.00 on the Toronto Stock Exchange. ERL pays an annual of $8.00 per share at year-end. Government scientists have announced a breakthrough that they say will make radiators obsolete in 10 years, at which time the shares in ERL would become worthless. Interest rates are expected to fluctuate between 3% and 8% over the next 10 years.
Required:
Use present value calculations to determine whether it makes sense for you to buy shares in Exem Radiator Limited. Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...