What is the intrinsic value of the stock at current year

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Reference no: EM132019611

Suppose you are thinking of purchasing the stock of ABC, Inc. and you expect it to pay a $1 dividend in one year from now, and dividend of $1.30 in two year from now and you believe that you can sell the stock for $12.50 at the end of year 2.

If you require a return of 10% on investments of this risk, what is the intrinsic value of the stock at current year?

Reference no: EM132019611

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