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Your broker offers to sell you some shares of Bahnsen & Co common stock that paid a dividend of $2 yesterday. You expect the dividend to grow at the rate of 5% per year for the next 3 years, and if you buy the stock, you plan to hold it for 3 years and then sell it. If you plan to sell the stock at the end of 3 years at $34.73 , what is most you should pay for it today? The discount rate you use is 12%.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M91647134

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