November 26, 2015

Homework Help: econ

Posted by sara on Thursday, March 6, 2014 at 8:23am.

In the country of Ambiguostan, the government is providing salt-mine concessions to USalt & Co, but due to recent elections, will be revoking these concessions in 9 years. Since the salt business will be booming for years to come, USalt & Co is a highly traded stock and will continue its operations until the concessions expire. In that year, it will pay dividends of $13 million out of their profits and then shut down. Currently there are 450,000 shares of USalt & Co stock in the market. Ambigoustan\'s interest rate is 10% (you can assume it will not change). What would be the present value of a share of USalt & Co stock (rounded to the nearest dollar)?

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