You own 2,200 shares of stock in Avondale Corporation. You will receive a $1.60 per share dividend in one year. In two years, Avondale will pay a liquidating dividend of $60 per share. The required return on Avondale stock is 20 percent. Suppose you want only $3,000 total in dividends the first year.
What will your homemade dividend be in two years