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The FI Corporations dividends are expected to grow indefinitely by 5% per year, and its required rate of return is 10% per year. Assume that
The FI Corporations dividends are expected to grow indefinitely by 5% per year, and its required rate of return is 10% per year. Assume that FI stocks market price is equal to this intrinsic value. If I buy the FI stock now, hold it for a year, and sell it at the year-end. What is my holding period return for this year?
- More than 10%
- Less than 10%
- Exactly 10%
- Not enough information to tell.
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