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A risk-free security pays a dividend of $200 after two years $300 after three years and $400 for the next four years (after four, five,

A risk-free security pays a dividend of $200 after two years $300 after three years and $400 for the next four years (after four, five, six and seven years – total 4 cash flows of $400). The risk-free interest rate is 2% for the first two years and 5% for the third year. 


After that the rate will drop to 4% forever, what is the market price of this security?

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