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Melissa Popp is thinking about buying some shares of Education, Inc., at $50 per share. She expects the price of the stock to rise to
Melissa Popp is thinking about buying some shares of Education, Inc., at $50 per share. She expects the price of the stock to rise to $75 over the next three years. During that time, she also expects to receive annual dividends of $5 per share.
a. What is the intrinsic worth of this stock, given a 10% required rate of return?
b. what is its expected return?
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