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Purchase a common stock

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Reference no: EM132042319

The scenario we are looking at is that we want to purchase a common stock and hold it for 7 years. Samsung just announce that they will be paying an annual cash dividend of $6.00 per share over the next 9 years. The question is how much should we pay for the Samsung Stock now, if we know we will be able to sell it for $28 at the end of the seven years, and we want to earn an annual rate of return of 11% on this investment?

Reference no: EM132042319

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