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Charlene Lewis is considering the purchase of some shares of Education, Inc. at $50 per share. She expects the share price to rise to $75

Charlene Lewis is considering the purchase of some shares of Education, Inc. at $50 per share. She expects the share price to rise to $75 in the next three years. During that time, she also expects to receive annual dividends of $5 per share.

a) What is the intrinsic value of this stock given a required rate of return of 10%?

b) What is its expected return?

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