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Please show all the details of your work. BLUE442 stock has the following probability distribution of expected prices one year from now: State Probability Price

Please show all the details of your work.

BLUE442 stock has the following probability distribution of expected prices one year from now:

State Probability Price

1 .25 $50

2 .40 $60

3 .35 $70

If you require a risk premium of 5% and Rf is 4%.

What is the price you are willing to pay today for BLUE442? Assuming the stock will pay a dividend of $4 per share.

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