A firm pays quarterly dividends. Suppose the 4 dividends in year 1 are all $1....
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Finance
A firm pays quarterly dividends. Suppose the 4 dividends in year 1 are all $1. The 4 dividends in year 2 are all $1.1. The 4 dividends in year n are 1.1^(n-1). The next dividend is 3 months away. What is the value of the firm if we require 20% (APR, quarterly) discount rate? (Hint: break down the sum to 4 geometric series)
37.32
39.18
38.63
40.56
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