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Consider again the Ohio Engineering Company common stock. Suppose that the investor is considering purchasing a share of this stock and holding it for five
Consider again the Ohio Engineering Company common stock. Suppose that the investor is considering purchasing a share of this stock and holding it for five years. Assume that the investor's required rate of return is still 14 percent. Dividends from the stock are expected to be $1 in the first year, $1 in the second year, $1 in the third year, $1.25 in the fourth year, and $1.25 in the fifth year. The expected selling price of the stock at the end of 5 years is $41. What is the price of the stock? If the price is instead $22 and all other elements are held constant, what is the implied required rate of return
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