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A stock has a price ( i . e . , present value of all cash flows from the stock expected by investors ) of
A stock has a price ie present value of all cash flows from the stock expected by investors of $ today. It is expected to pay a dividend of $ per share next year, $ per share in the following year, $ in the subsequent U years ie pay a dividend of $ in years through year U into the future and then be sold for $ in U years where that $ represents the present value of all dividends expected after U years Compute the interest rate or expected return on this stock ie iterate to find the r that sets the sum of the present value of the future expected cash flows equal to the $ present value
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