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kk5612
May 15, 2007, 12:54 PM
How do I figure out the present value of my dividends are 2.00 at the end of the first year, 2.20 at the end of the second year and 2.40 at the end of the third year. The stock will sell for 33.00 at the end of the third year and the discount rate of 11% is applied?

HELP

bunnyKutty
May 20, 2007, 07:56 AM
Cash flows* PV factor@11% Present value
2* 0.901= 1.8
2.2 *0.812= 1.79
2.4* 0.731= 1.75
30* 0.731= 21.93
Total present value of future benefits = $27.27