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Example 10.1 Consider a situation in which we are valuing a share of common stock...

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Finance

Example 10.1 Consider a situation in which we are valuing a share of common stock that we plan to hold for only one year. What will be the value of the stock today if it pays a dividend of $2.00, is expected to have a price of $75 and the investors required rate of return is 12%?

Example 10.2 Continue example 10.1. What will be the value of common stock if you hold the stock for two years and sell it for $82?

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