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An investor plans to buy a common stock and hold it for two years. The investor expects to receive $0.6 dividend at the end of
An investor plans to buy a common stock and hold it for two years. The investor expects to receive $0.6 dividend at the end of year one and $0.9 at the end of year two. After receiving the dividend at the end of year two, the investor plans to sell the stock at $28.5 right away (at the end of the year two). Assume that the A&B Inc is evaluated to have a required rate of return of 24.58%.
What is the intrinsic value of the stock?
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