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15 points You are told the following Asset A has a constant) growth rate of dividends of and a constant) expected return on the asset

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15 points You are told the following Asset A has a constant) growth rate of dividends of and a constant) expected return on the asset of 10%. Asset B has a constant dividend and a constant expected return of 10%. The current dividend of Asset is the same as the current dividend for Asset B and equals 10. The price of Asset A is P, and that for Asset B is Pa and PA-Ps at time tis 110. Hence x is: 16 points Afirm that pays a constant dividend of 100 unexpectedly announces that with probability , it will not pay a dividend for the next year. The expected retum on the asset is 10% under normal circumstances but 25% if the firm pays no dividend. If the price is observed to fall by 80 what is

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