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BadCo is expected to pay dividends of $9.82, $7.97, $1.10, and $5.12 at the end of each of the next 4 years. The The last div
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Answer #1

Stock worth today = Present value of cash inflows

Stock worth today = 9.82 / (1 + 0.1078)^1 + 7.97 / (1 + 0.1078)^2 + 1.1 / (1 + 0.1078)^3 + 5.12 / (1 + 0.1078)^4

Stock worth today = 8.864416 + 6.494349 + 0.809112 + 3.399574

Stock worth today = $19.57

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