What is the current value of the companys stock

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1. JJ Industries will pay a regular dividend of $2.40 per share for each of the next four years. At the end of the four years, the company will also pay out a $40 per share liquidating dividend, and the company will cease operations. If the discount rate is 10 percent, what is the current value of the company’s stock?

2. In the previous problem, suppose the current share price is $60. If all other information remains the same, what must the liquidating dividend be?

Reference no: EM13806680

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