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A broker offers to sell you some shares of Wingler & Company common stock, which paid a dividend of $2 yesterday. You expect the dividend
A broker offers to sell you some shares of Wingler & Company common stock, which paid a dividend of $2 yesterday. You expect the dividend to grow at a rate of 5 percent per year into perpetuity. The appropriate rate of return for the stock is 12 percent.
A. If you purchase the Wingler & Company stock with the intent of selling it in three years, what cash flows will you receive each year?
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