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Consider a firm that can either pay out dividends of $10,000 per year for each of the next two years or can pay $9,000 this
Consider a firm that can either pay out dividends of $10,000 per year for each of the next two years or can pay $9,000 this year, reinvest the other $1,000 into the firm and then pay $11,120 next year. Investors require a 12% return
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