What is the current price for ABC inc. common stock if the stock is expected to...

What is the current price for ABC inc. common stock if the stock is expected to pay a dividend of $1.00 in one year, $1.50 in 2 years and $1.70 in three years, assuming you will sell the stock in three years for $90.39 (just after you received the 3rd dividend) and the required rate of return is 8%

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Expert Solution

Given information

1) rate of return = 8%

2) Dividends received

at end of year 1 = $ 1.00

at end of year 2 = $1.50

at end of year 3= $1.70

selling price of stock at end of third year=$90.39

jeff jeffy answered 2 years ago

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