Answer:
present value of stoke combine equation is $82.43
Explanation:
Given data
no of period = 4
discount rate = 6% = 0.06
dividends = $0.00, $2.30, 2.60, and $2.90
to find out
current stoke price
solution
we know dividend is 0 for st year so present value for 1st year will be 0 .....1
now we calculate
present value 2nd year dividend is = 2.30 / (1+0.06)^2
present value 2nd year dividend is = $2.05 ............2
present value 3rd year dividend is = 2.60 / (1+0.06)^3
present value 3rd year dividend is = $2.18 ..............3
present value 4th year dividend is = 95.83 / (1+0.06)^4
present value 4th year dividend is = $75.91 ..............4
present value of stoke combine equation 1 + 2 + 3 + 4
present value of stoke combine equation = 2.05 + 2.18 + 2.30 + 75.91
present value of stoke combine equation is $82.43
