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You expect Carter State Bank to pay a $6 dividend at the end of period 1, $7 at the end of period 2, and then
You expect Carter State Bank to pay a $6 dividend at the end of period 1, $7 at the end of period 2, and then plan to sell the stock for a price of $150 per share. What is the value of the stock according to the Dividend Discount Model (DDM) if the relevant discount rate to capture risk is 11%?
a) 74.60
b) 91.80
c) 103.62
d) 132.83
e) 145.28
You expect Carter State Bank to pay a $6 dividend at the end of period 1, $7 at the end of period 2, and then plan to sell the stock for a price of $150 per share. What is the value of the stock according to the Dividend Discount Model (DDM) if the relevant discount rate to capture risk is 11%?
a) 74.60
b) 91.80
c) 103.62
d) 132.83
e) 145.28
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