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Determining the stock expected value

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Assume that D0, which was just paid, = $1.00, D1= $1.20, D2 = = $1.40, D3 = $1.55, D4 = $2.00, D5 = $2.13, D6 = $2.27, and P3 = $80.00. If the required return is 8.6%, then, based on this information and security valuation concepts, what should be the stock's expected value (price) today, (i.e.. P0)? I encourage you to draw a time line clearly indicating the situation. (Notation: Dt is Dividend at end of period t, Pt is expected price at end of period t.)

Reference no: EM132597826

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