The current value of this stock at a 14% discount rate is $31.50.
Using, stock price formula
[tex]P_{n} = \frac{D_{n}}{(1+g)^{n} }[/tex]
P = stock price, D = dividend, g = growth rate/discount rate
Now, sum of all the prices in each year:
[tex]\frac{3}{1+0.14} + \frac{6}{(1+0.14)^{2}} + \frac{36}{(1+0.14)^{3}}[/tex]
Current Value = $31.50
Liquidation Plan refers to any plan for a company or fund to liquidate, sell off a significant percentage of its assets outside of regular business operations (other than in connection with a permitted merger), or take any other comparable action. The idea behind current value accounting is that assets and obligations should be valued at the price at which they may now be sold or settled.
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