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You are considering buying a security that makes annual payments (to you) that grow by 1% per year forever, with the first payment made one
You are considering buying a security that makes annual payments (to you) that grow by 1% per year forever, with the first payment made one year from today and in the amount of $2. Your required return is 6% per year for this security. How much should you be willing to pay to purchase the security?
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