Fin 12 Final Exam Problem

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Fin 12 Final Exam Problem #1 A firm just paid a dividend of $2 and the growth rates are forecasted to be 3% in the first period and then 2% for every period afterwards. The stock has a required rate of return of 12%. Find the dividends payments for periods 1, 2, and 3. Find the price of the stock at time 1. Find the price of the stock at time 0 (today). If the stock is trading for $12.75 would you buy it or want to sell it? Problem #2 Suppose that you have the following information about two assets.

  • 9 years ago
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