Find out stock value of the company with following dividend plans: $ 3, $ 4, $ 5, $6 , $7 for the first five years, then a final liquidating dividend of $60 at year 6. Assume discount rate for this stock is 15%. Find out the current stock value .

The current stock price will be $41.77

The current stock value will be the present value of all the dividends over the five years in question and then the present value of the liquidating dividend in the 6th year.

Present value = Dividend / ( 1 + rate) ^ year it was paid

Present value of all the dividends = ( 3 / (1 + 15%)) + (4 / (1 + 15%)²) + (5 / (1 + 15%)³) + (6 / ( 1 + 15%)⁴) + (7 / ( 1 + 15%)⁵) + ( 60 / ( 1 + 15%)⁶)

= $41.77

More information on stock price based on dividends can be found at and

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