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Question (a) You are contemplating investing in stock ABC with THREE (3) equally probable cash flows of: 6,000, 10,000, and 20,000 at the end of

Question (a) You are contemplating investing in stock ABC with THREE (3) equally probable cash flows of: 6,000, 10,000, and 20,000 at the end of year. If short-term government bond is offering 4% in the same period and you require a risk premium of 8%, how much are you willing to pay for ABC now?

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