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Coolibah Holdings is expected to pay dividends of $ 1.00 every six months for the next...

Coolibah Holdings is expected to pay dividends of $ 1.00 every six months for the next three years. If the current price of Coolibah stock is $ 22.40​, and​ Coolibah's equity cost of capital is 14​%, what price would you expect​ Coolibah's stock to sell for at the end of three​ years?

A. $ 26.46

B. $ 29.11

C. $ 31.75

D. $ 30.43

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Answer #1

The price at the end of three years is calculated using the FV function as follows:

=FV(rate,nper,pmt,pv)

=FV(14%/2,3*2,1,-22.4)

=26.46

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