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QUESTION 7 Assume a two period perfect certainty world. A firm has the following investment opportunities: The firm has an initial endowment of $500,000 and

QUESTION 7

Assume a two period perfect certainty world. A firm has the following investment opportunities:

The firm has an initial endowment of $500,000 and the market rate of return is 10.00%.

Assuming that the firm faces no capital constraints and pay no dividend in period 1, what is the dividend available for distribution in period 2 if it decides to undertake all projects?

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