Cash flows per share and cost of capital

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Reference no: EM13978973

An analyst knows with certainty that Skipper Inc. will exist for two years and have the following cash flows per share:

Year 1 Year 2

Revenue $100 $100

Costs $ 80 $ 80

New Cash Flow $ 20 $ 20

a) What is the stock price of Skipper Inc., if the opportunity cost of capital is 8 percent?

Reference no: EM13978973

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