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Three investors have the same required return for a stock and agree on the growth rate. But they disagree about what the next dividend will be. Investor l thinks there is a 25% probability that it will be $5.00; Investor 2 thinks there is a 40% probability that it will be $4.00, and Investor 3 thinks there is a 35% probability it will be $6.00. They have agreed to price the stock on the expected value of the next dividend. What is that price?

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Financial Management, Finance

Category:- Financial Management
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