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Umnica [9.8K]
3 years ago
6

You expect a share of EconNews.Com to sell for $65 a year from now. If you are willing to pay $65.74 for one share of the stock

today, and you require a return of 8%, what dividend payment must you expect to receive from the stock?
Business
1 answer:
iogann1982 [59]3 years ago
6 0

Answer:

dividend payment = $6

Explanation:

given data

sell = $65

pay = $65.74

require a return =  8%

solution

we will use here present value formula that is express as

current stock price ( present value ) = \frac{future\ value}{1 + rate}  ........................1

$65.74 = \frac{65+d}{1+0.08}

here d is dividend

solve it we get

d = $6.00

so dividend payment = $6

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