What will be the value of a stock

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Reference no: EM133060954

Questions -

Q1. You want to invest your money in a financial asset. You have two options. On the basis of your calculation, decide which one should you choose and why.

Probability of Stock A 20% 10% 30% 40%

Return of Stock A -5% 8% 15% 16%

Probability of Stock B 15% 35% 20% 30%

Return of Stock B - 3% 6% 10% 20%

Q2. What will be the value of a stock that just paid dividend $6. It will grow at 18% for 2 years and then at 11% for 6 years and finally at 9% thereafter. The required rate of this stock is 15.

Reference no: EM133060954

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