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Ally is considering purchasing common stock of ABC Inc. with the intention of holding it for three years. The company's directors have recently announced an
Ally is considering purchasing common stock of ABC Inc. with the intention of holding it for three years. The company's directors have recently announced an anticipated annual cash dividend of $4.00 per share for the next five years. Ally predicts that she will be able to sell the stock for $20 per share at the end of the three-year period. To achieve a desired return of 15% on her investment. Draw the timeline illustrating the dividend and stock selling price within the duration of Ally holding of the ABC Inc stock. Compute the maximum price that Ally should be willing to pay for this stock
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