5.16 You own $100,000 worth of Smart Money stock. At the end of the first year you...

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5.16 You own $100,000 worth of Smart Money stock. At the end of the first year you receive a dividend of $2 per share; at the end of year 2 you receive a $4 dividend. At the end of year 3 you sell the stock for $50 per share. Only ordinary (dividend) income is taxed at the rate of 28 percent. Taxes are paid at the time dividends are received. The required rate of return is 15 percent. How many shares of stock do you own?

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Corporate Finance

ISBN: 9780071229036

6th International Edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe

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