Paula earns $40,000 per year and rides her bicycle to work. There is a 1% chance that she will break her leg in the next year an
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Answer:
Following are the solution to this question:
Explanation:
Please find the complete question and its solution in the attached file.
Answer:
$31.9211
Explanation:
We discount the future two year dividends at the required rate of return
and solve for the present value of the infinite series of dividends growing at 3.6% with the dividend grow model:
PV 33.6
Then we discount this by the two years ahead of time these cashflow start and add them to get the PV of the stock which is their intrinsic market value