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Security C: a risky stock whose current dividend (just paid, so the current price is ex-dividend) is $1 and whose dividend is expected to grow
Security C: a risky stock whose current dividend (just paid, so the current price is ex-dividend) is $1 and whose dividend is expected to grow once by 60% this year and then remain constant at that level forever, also with an expected return of 10%.
assume any cash flows are paid annually with the first cash flow due one year from today.
(a) what is the present value of Security C?
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