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Please do A until C THANK YOU Suppose Acap Corporation will pay a dividend of $2.84 per share at the end of this year and
Please do A until C
THANK YOU
Suppose Acap Corporation will pay a dividend of $2.84 per share at the end of this year and $2.96 per share next year. You expect Acap's stock price to be $51.67 in two years. Assume that Acap's equity cost of capital is 10.6%. a. What price would you be willing to pay for a share of Acap stock today, if you planned to hold the stock for two years? b. Suppose instead you plan to hold the stock for one year. For what price would you expect to be able to sell a share of Acap stock in one year? c. Given your answer in (b), what price would you be willing to pay for a share of Acap stock today if you planned to hold the stock for one year? How does this compare to your answer in (a)? a. What price would you be willing to pay for a share of Acap stock today, if you planned to hold the stock for two years? If you plan to hold the stock for two years, the price you would pay for a share of Acap stock today is $ (Round to the nearest cent.)Step by Step Solution
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