If someone invests in a stock that will pay dividends of $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. Also, this person believes that at the end of the third year they will be able to sell the stock for $33 dollars. What is the present value of all future benefits if a discount rate of 11% is applied?

Lynn

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
Net present value of future benefits = $27.27