Determining the homemade dividends


You own 1,000 shares of stock in Avondale Corporation. You will receive a $2.30 per share dividend in one year. In two years, Avondale will pay a liquidating dividend of $53 per share. The required return on Avondale stock is 15 percent. suppose you want only $750 total in dividends the first year, show how you can accomplish this by creating homemade dividends. Your total dividend amount in year 2 will be $___. (Do not include the dollar sign ($). Round your answer to 2 decimal places. (e.g., 32.16))

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Finance Basics: Determining the homemade dividends
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