Answer:
Present Vlaue of the stock = $45.60
Explanation:
The question is primarily to determine the present value of the investment in Coc-Cola Stock based on the information provided as follows
The Stock Price ast the end = $48 (this will be added at the end with the last dividend)
The Quarterly dividend per year = $0.3
The period = 4 quarters (in a 12 month period) = n
Discount rate = 2% = r
The present value = Dividend per share / (1+r)∧1 + Dividend per share / (1+r)∧2 + Dividend per share / (1+r)∧3 + Stock Price given + Dividend per share / (1+r)∧4
= 0.33 / 1.02∧1 + 0.33 / 1.02∧2 + 0.33 / 1.02∧3 + (48 + 0.33) / 1.02∧4
= $45.60
