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Financial Markets and Rational Expectation a. The current price of a stock is 65.88. If dividends are expected to be 2 per share for the

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Financial Markets and Rational Expectation a. The current price of a stock is 65.88. If dividends are expected to be 2 per share for the next three years, and the required return is 10%, then what should the price of the stock be in 3 years when you plan to sell it? If the dividend and required return remain the same, and the stock price is expected to increase by 2 three years from now, by how much the current stock price is expected to increase? (17 Marks)

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