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What is the stock price if the discount rate

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Reference no: EM13940418

You expect a share of stock to pay dividends of $1.00, $1.25, and $1.50 in each of the next 3 years. You believe the stock will sell for $20 at the end of the third year.

a. What is the stock price if the discount rate for the stock is 10%?

b. What is the dividend yield?

Dividends:
Year 1..........$1.00
Year 2..........$1.25
Year 3..........$1.50
Discount rate........10.00%
Stock price after 3 years..$20.00

Reference no: EM13940418

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