What is the fair value of a stock that has just paid

Reference no: EM133557968

An investor buys an asset at an initial cost of $20,120,578. The investor believes that at the end of one year, the asset could have four possible values. These values and probabilities are provided in the table below. Scenario Expected value Probability A 18,805,000 27% B 21,100,790 31% C 24,865,000 28% D 26,947,000 14% Required a. In dollars and cents, what is the expected value of the asset in 1 year? (3 marks) b. In percentage terms to 2 decimal places, what is the expected return on the asset? {1 mark) 5. In percentage terms to 2 decimal places, what is the expected standard deviation oftne return of the asset? {6 marks) d. In dollars and cents, what is the fair value of a stock that has just paid a dividend of $7.54, which is expected to grow inde?nitely at 1.88%pa, and that has a cost of capital of 12.36%?

Reference no: EM133557968

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