Suppose that a security will generate the following cashflows. Starting with a payment of $100...
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Suppose that a security will generate the following cashflows. Starting with a payment of $100 in 3years, annual payments will increase at a rate of 4% until year 10. Starting in year 11until forever, the annual payments will be equal in magnitude to the amount paid in year 10. If the rate of return you can earn in this market is 6%, what is the fair price of this security today?
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