What is rate of return in each year

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1. Assume that company G pays no interim dividends, so you receive $536 at the end of the project. What is G's market value at time 1, 2, and 3? What is your rate of return in each year? Assume that the cost of capital is still 10%.

2. Assume that company G pays out the full cash flows (refer to the text example) in earnings each period. What is G's market value at time 1, 2, and 3? What is your rate of return in each year?

3. One month ago, a firm suffered a large court award against it that will force it to pay compensatory damages of $100 million next January 1. Are shares in this firm a bad buy until January 2?

Reference no: EM131234073

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