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We have a stock which does not pay anything for 5 years. Afterward, it starts paying a dividend of $4, which rises by 2% per annum. The cost of equity is owed to the risk free rate of 3% and the market premium, which is 9%. The stock varies with the stock market By 200%. That is, when the market rises(drops) 100% the stock rises (drops) 200%.

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Financial Management, Finance

Category:- Financial Management
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