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kkurt [141]
3 years ago
11

You are considering acquiring a common share of Sahali Shopping Center Corporation that you would like to hold for 1 year. You e

xpect to receive both $1.85 in dividends and $45 from the sale of the share at the end of the year. The maximum price you would pay for a share today is __________ if you wanted to earn a 10% return.
Business
1 answer:
kodGreya [7K]3 years ago
3 0

Answer:

$42.60

Explanation:

Current value = Future dividends and value*Present value of discounting factor(rate%,time period)

Current value =  $1.85 / (1+10%) + $45 / (1+10%)

Current value =  $1.85/1.1 + 45/1.1

Current value = $ 1.68181 + $40.91

Current value = $42.5918

Current value = $42.60

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