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Question 4 (12 points) The company your aunt works for recently made two announcements to its common stockholders just last week. First, the company announced

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Question 4 (12 points) The company your aunt works for recently made two announcements to its common stockholders just last week. First, the company announced that their next annual dividend (which will be DIV1) will be $2.50 per share. Also announced was that all dividends after that time will increase by 2 percent annually (g = 2%). What is the maximum amount she should pay to purchase a share of this stock today, on 12/18/2020, if she requires an 11 percent rate of return (r = 11%)? Next, assume your aunt plans to buy 100 shares of the company's stock at the price she determined above. How much money (total funds invested) will your aunt be investing in this common stock today? Finally, assume all variables noted above stay constant for the next five (5) years (so g = 2% and r=11%), and she decides to sell her 100 shares of her stock in 2025. What will be your aunts total capital gains earned (in dollars) when she sells the investment in 2025? Price Per Share Today (P2020) - Total Funds Invested Today (S) = Total Capital Gains Realized in 2025 ($)

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