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Assume you are interested in investing in a stock. The firm pays out all their income in an annual dividend of $2.00 each year. This
Assume you are interested in investing in a stock. The firm pays out all their income in an annual dividend of $2.00 each year. This dividend is not expected to change ever. The appropriate cost of stock is 12% (This is the discount rate). What is the value of this stock? If you sell this stock in 1 year, what do you expect the sales price to be?
(Please complete in excel if possible)
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