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atre primary reserves and secondary reserves, and what are they supposed to do? 5. S uppose a bank is expected to pay a dividend of
atre primary reserves and secondary reserves, and what are they supposed to do? 5. S uppose a bank is expected to pay a dividend of $5 per share in period 1, dividends are expected to grow 6% a year for all future years, and the appropriate discount rate to reflect shareholder risk is 10%. What is the value of the bank's stock? 6. Suppose investors expect a bank to pay a $5 dividend at the end of period 1, $10 at the end of period 2, and then plan to sell the stock for a price of $150 per share. If the relevant discount rate to capture risk is 10%, what is the current value of the bank's stock
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