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Old 11-20-2001, 01:59 PM
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Default Question Regarding Hypothetical Situaion



Suppose someone owned a company that had no asset value; could not be sold; pay no dividends, the number of share is 1,000,000 and would stay constant; would be guaranteed to have retained $1 million in earnings after 10 years; and will autimatically cease to exist after 10 years with no costs incurred in terminating it's existance. Therefore the shareholders divide up $1,000,000 proportionate to the number of shares they have. How much would you pay for a share of this company today? In my opinion the answer is not clear cut. You could always say $0.01 a share and that would be too little.
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