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Suppose a stock pays shareholders $100/year in dividends. The stock is to be held for 10 years. How much will an investor be willing to
Suppose a stock pays shareholders $100/year in dividends. The stock is to be held for 10 years. How much will an investor be willing to pay for the stock at 10% interest, if the investor is certain that the company will go bankrupt after 10 years (i.e., the stock will be worthless and no further dividends will be paid)?
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