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Please provide answer with detailed steps Yesterday a security just paid $4.8 to its investor. The investors expects the cash flows to grow steadily at
Please provide answer with detailed steps
Yesterday a security just paid $4.8 to its investor. The investors expects the cash flows to grow steadily at a rate of 7% per year forever. a. What is the expected cash flows in each of the next 3 years? (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. If the discount rate for the security is 170%, at what price will the security sell for? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. What is the expected price of the security 3 years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.) d. If you buy the security and plan to hold it for 3 years, what payments will you receive? What is the present value of those payments? (Leave no cells blank - be certain to enter "O" wherever required. Do not round intermediate calculations. Round your answers to 2 decimal places.)Step by Step Solution
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