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You are approached about purchasing a share of common stock in a company that will definitely go out of business exactly 2 years from today. The company is anticipated to pay a $10 dividend one year from now and a $15 divined two years from now (immediately before it goes out of business). What price are you willing to pay for the stock if the required rate of return on the stock is 5%?

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Financial Management, Finance

Category:- Financial Management
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