Homework Answers
Value of stock is equal to the present value of all future dividends
= 3.10*PVAF(13.5%, 6 years) + 3.10(1.015)/(13.5%-1.5%)*PVF(13.5%, 6 years)
= 3.10*3.943 +26.2208*0.468
= $24.49
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