Assume that the prevailing interest rate

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On April 12, 2006, Microsoft stock traded for $27.11 and claimed to pay an annual dividend of $0.36. Assume that the first dividend will be paid in 1 year, and that it then grows by 5% each year for the next 5 years. Further, assume that the prevailing interest rate is 6% per year. At what price would you have to sell Microsoft stock in 5 years in order to break even?

Reference no: EM131208048

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