JJ Industries will pay a regular dividend of $2.50 per share for each of the next four years. At the end of the four years, the company will also pay out a liquidating dividend of $61 per share, and the company will cease operations. If the discount rate is 8 percent, what is the current value of the company’s stock

$53.11

Explanation:

The computation of the current value of the common stock is shown below

YearCash flowDiscount rate at 8%Present Value  

1          $2.5          0.92593                   $2.31  

2          $2.5          0.85734                            $2.14  

3          $2.5          0.79383                            $1.98

4           $2.5                0.73503                            $1.84

4          $61            0.73503                            $44.84  

Total                                                      $53.11

The discount is come from

= 1 ÷ 1 + 0.08^1

The same is applied for other years

We simply multiplies the dividend with its discount rate so that the present value or the current value could arrive

so they can see what that city is producing and to also see if they can some how get that product. like gold in africa.

answer(d) all of the choices are correct;