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Question 1. The diagram below shows the expected cash dividends for the stock of Com- pany A over the next five years. Suppose that you
Question 1. The diagram below shows the expected cash dividends for the stock of Com- pany A over the next five years. Suppose that you are interested in buying one share of this stock for $200 and will hold it for five years. If the interest rate is known to be 2% compounded annually, what would be the desired (minimum) selling price for one share of Company A at the end of the fifth year (2026)? $40 $30 $35 $20 $15 Time 2021 2022 2023 2024 2025 2026 $200
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