Question

What is a fair market price for a stock that does not ever pay, nor does...

What is a fair market price for a stock that does not ever pay, nor does anyone believe, it will ever pay a dividend?

A) $100

B) $2,000

C) $ infinite

D) $0

E) $1

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Homework Answers

Answer #1

  

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Since there will never be any dividend then the value will be 0 as the stocks are perpetual and it is possible that the investor will receive a premium on the redemption as they are never redeemed.

Therefore the value will be 0.

Option D is correct.

NOTE: Do upvote the answer, if this was helpful.

NOTE: Please don't downvote directly. In case of query, I will solve it in comment section in no time.

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