Jack Hammer 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 percent is applied? (Round all values to two places to the right of the decimal point.)© BrainMass Inc. brainmass.com October 9, 2019, 8:10 pm ad1c9bdddf
Here we have to find the present value of all the cash inflows that Jack Hammer is ...
This response shows the computation of present value of the stock with the help of an illustration.