Demonstrate how much is the stock worth

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Problem 1: Riverhawk Sport Authority (RSA) will pay a dividend of $7 for each of the next 3 years, $8 for each of the years 4-6, $9 for each of the years 7-9, and a dividend of $10 for year 10. Thereafter, the company will pay no dividends. If you require 13 percent rate of return on investments in this risk class, how much is this stock worth to you?

A. $44.66
B. $39.35
C. $37.80
D. $42.77
E. $46.68
F. $41.00

Reference no: EM132721610

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