The CFO invests in a stock that will pay dividends of $2.00 at the end of the first year; $2.20 at the end of the second year; and $2.40 at the end of the third year. Also, he believes that at the end of the third year he will be able to sell the stock for $33. What is the present value of all future benefits if a discount rate of 11% is applied? (Round all values to two places to the right of the decimal point.)© BrainMass Inc. brainmass.com June 3, 2020, 7:01 pm ad1c9bdddf
The cash flows are given as
Year 1 ...2.00
Year 3...2.40 + 33 ( ...
The solution explains the calculation of present value of cash flows.