Question
The price of a nil dividend paying share is Shs 200, and there are 30% chances that it would be Shs 190 and 70% chances
The price of a nil dividend paying share is Shs 200, and there are 30% chances that it would be Shs 190 and 70% chances that it would be Shs Y in two years time. If the expected annual rate of return is 7%, calculate the value of Y.
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Step: 1
To calculate the value of Y we can use the concept of the expected value The exp...
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Statistics For Business Decision Making And Analysis
Authors: Robert Stine, Dean Foster
2nd Edition
978-0321836519, 321836510, 978-0321890269
