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You own 1,000 shares of stock in Avondale Corporation. You will receive $3.115 per share cash...

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Finance

You own 1,000 shares of stock in Avondale Corporation.You will receive $3.115 per share cash dividend in one year. In twoyears, the company will pay a liquidating dividend of $57 pershare. The required return on the company’s stock is 15 percent.What is the current price of your stock? (Ignore taxes). If youwould rather have equal dividends in each of the next two years,show how you can accomplish this by creating homemade dividends(Hint: dividends will be in a form of annuity).

Please show work!

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You own 1,000 shares of stock in Avondale Corporation.You will receive $3.115 per share cash dividend in one year. In twoyears, the company will pay a liquidating dividend of $57 pershare. The required return on the company’s stock is 15 percent.What is the current price of your stock? (Ignore taxes). If youwould rather have equal dividends in each of the next two years,show how you can accomplish this by creating homemade dividends(Hint: dividends will be in a form of annuity).Please show work!

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