Question
A firm has an initial endowment of $70,926. The firm has identified three non-divisible feasible projects: Project-A requires $27,920 investment now to generate $31,354 next
A firm has an initial endowment of $70,926. The firm has identified three non-divisible feasible projects: Project-A requires $27,920 investment now to generate $31,354 next year; Project-B requires $21,860 investment now to generate $33,161 next year; and Project-PC requires $52,012 investment now to generate $62,787 next year. The firm invests in projects reasonably to maximise wealth. The average expected rate of return from the market is 12%. If John owns 55% shares of the firm, how much dividend would be expected by John in the next period based on the Two-Period Perfect Certainty model?
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