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a Current share price of the stock is r= 20% = (Dividend/(1+r)) + (liquidating dividend)/(1+r)^2) = (2.6/(1+20%))+(75/(1+20%)^2) $ 54.25 Current share price of the stock is b One year from today, the stock price is Equal value of dividends in two years is =75/(1+20%) 62.5 =PMT(rate, nper, pv,fv, type) --PMT(20%,2,54.25,0,0) $ 35.51 Percentage of shares need to sell Percentage of shares need to sell No of shares need to sell No of shares need to sell =(35.51-2.6)/62.5 52.6560% =1100*52.656% 579.22 shares с Cash flows Cash flows =35.51 * 1100 $ 39,061 I hope this solves your doubt. Feel free to comment if you still have any query or need something else. I'll help asap. Do give a thumbs up if you find this helpful.
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