What is the appropriate price or present-day value

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Reference no: EM131518781

a. What is the appropriate price, or present-day value (PDV), of a share of stock that has a constant yearly dividend of $1, if the market interest rate (i) is 2%?

b. What is the PDV of the same stock if the market interest rate rises to 4%?

c. Use those two answers to explain why stockholders hate to see interest rates go up?

Reference no: EM131518781

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