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What is the current price of lod stock

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Reference no: EM133111018

The stock of Line of Duty (LoD), of which you own 645 shares, will pay a £3-per-share dividend one year from today. Two years from now, LoD will close its doors; stockholders will receive liquidating dividends of £23 per share (i.e. SE will be wound up and stockholders will receive £23 per share that they own). The required rate of return on LoD stock is 15%. The company is entirely financed with equity. Assume there are no taxes.

  • What is the current price of LoD stock?
  • You prefer to receive equal amounts of money at the end of each of the next two years.
  • What is the amount that you will receive each year?
  • How will you accomplish this? (i.e. how many shares will you sell and when?)

Reference no: EM133111018

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