# Present value of the stock

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.)

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Here we have to find the present value of all the cash inflows that Jack Hammer is ...

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This response shows the computation of present value of the stock with the help of an illustration.

$2.19