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How much would you be willing to pay for the share

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Reference no: EM132940576

Question - You expect Cost U Right to pay the following annual dividends for the next 3 years. Beta for Cost U Right is 0.15.

Year

Dividend

1

0.10

2

0.50

3

0.70

Dividends will be paid in two equal parts semi-annually. You also expect to be able to sell the share for $7.65 right after you receive the final year 3 dividend. If your required return is 6% annually, how much would you be willing to pay for the share?

A. $7.55

B. $6.35

C. $8.95

D. $10.25

Reference no: EM132940576

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