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solve. Answer ASAP A old established company, Old Blue Inc just paid a dividend of $2.00 and the dividend is expected to grow at 2%
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A old established company, Old Blue Inc just paid a dividend of $2.00 and the dividend is expected to grow at 2% per year. Another startup company, Red Hot Inc is not currently paying a dividend but is expected to pay a dividend in 10 years of $2.00 and that dividend will grow at 2% per year there after. The investors required return is 20%. Fill in the box below. Round answers to 2 decimal. 1. What is the stock prices for both Old Blue and Red Hot today and in 10 years? 2. What is the capital gain (%) over the 10 year for both stocks? 3. Which stock pays the highest return over the 10 years? (HINT: This is a 'trick' question) Format Uv A/ V V R + v Lato (Recom... 19px ... THE Ea Number of Years = 10 Req'r Return = 20% Old Blue Inc Price Today Price in 10 Years Do = $2.00 g= 2% % Capital Gain Red Hot Inc Price Today Price in 10 Years D10 = $2.00 g= 2% % Capital Gain =Step by Step Solution
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