Interest rate swaps is to reduce exchange rate risk

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1. Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $21.00, $15.00, $6.40 and $2.90. Afterwards, the company pledges to maintain a constant 3 percent growth rate in dividends forever. If the required return on the stock is 18 percent, what is the current share price?

2. The primary purpose of interest rate swaps is to reduce exchange rate risk. A) True B) False

Reference no: EM132038388

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