What is the current price of blue devil stock

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Blue Devil Corporation stock, of which you own 500 shares, will pay a $2 per share dividend one year from today. Two years from now Blue Devil will close its doors and stockholders will receive a liquidating dividend of $17.5375 per share. The required rate of return on Blue Devil stock is 15 percent.

(a) What is the current price of Blue Devil stock?

(b) You prefer to receive equal amounts of money in each of the next two years. How can you accomplish this?

Reference no: EM131176491

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