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A Stock Is Expected to Pay $1

Question 27

Multiple Choice

A stock is expected to pay $1.25 per share every year indefinitely and the equity cost of capital for the company is 8.4%. What price would an investor be expected to pay per share ten years in the future?


A) $14.88
B) $22.32
C) $29.76
D) $37.20

Correct Answer:

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