Answer:
$42.60
Explanation:
Current value = Future dividends and value*Present value of discounting factor(rate%,time period)
Current value = $1.85 / (1+10%) + $45 / (1+10%)
Current value = $1.85/1.1 + 45/1.1
Current value = $ 1.68181 + $40.91
Current value = $42.5918
Current value = $42.60
The maximum price that should be paid for the share today is $42.60.
Current value = Future dividends and value × Present value of discounting factor(rate%,time period)
= $1.85 ÷ (1+10%) + $45 ÷ (1+10%)
= $1.85 ÷ 1.1 + 45 ÷ 1.1
= $ 1.68181 + $40.91
= $42.5918
= $42.60
Learn more: brainly.com/question/17429689
