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Suppose you are considering buying a stock. You expect the stock to pay a dividend of $4 one year from today, $4.10 two years from
Suppose you are considering buying a stock. You expect the stock to pay a dividend of $4 one year from today, \$4.10 two years from today, and then dividend will grow 1.5% each year after that. Using the CAPM, you estimate your required return at 9% to compensate you for the risk of this stock's cash flows. What is the maximum price you are willing to pay for a share of the stock? LO3 $53.82 $41.19 $52.67 $45.13
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