You own 1,000 shares of stock in Armstrong Corporation. You will receive a $2.70 per share dividend

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You own 1,000 shares of stock in Armstrong Corporation. You will receive a $2.70 per share dividend in one year. In two years, Armstrong will pay a liquidating dividend of $46 per share. The required return on Armstrong stock is 15%. 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.

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Related Book For  answer-question

Fundamentals Of Corporate Finance

ISBN: 9781259654756

10th Canadian Edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan, Gordon Roberts, J. Ari Pandes, Thomas Holloway

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