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A Share Is Expected to Pay Dividends of $1 in One

Question 56

Multiple Choice

A share is expected to pay dividends of $1 in one year,$1.20 in two years and then $1.30 in three years with this amount lasting in perpetuity.The current intrinsic value of this share given a discount rate of 5% is:


A) $25.10.
B) $25.62.
C) $26.43.
D) $38.43.

Correct Answer:

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