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Please show work. 37. A stock has a price (i.e., present value) of $13.00 today. It is expected to pay a dividend of $1 per
Please show work.
37. A stock has a price (i.e., present value) of $13.00 today. It is expected to pay a dividend of $1 per share next year, S1.10 per share in the following year, 51.20 in the subsequent 12 years (i.e., pay a dividend of s1.20 in years 3 through year 14 into the future), and then be sold for $15.00 in 14 years. Compute the interest rate or expected return on this stock (.e., iterate to find the r that sets the sum of the present value of the future expected cash flows equal to the $13 present value)Step by Step Solution
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