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A firm is not expected to pay a dividend for the next three years. If the...

A firm is not expected to pay a dividend for the next three years. If the expected share price of the firm in three years is $48 and investors require a 14% rate of return, what is the expected share price today?

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Expert Solution

Price in 3 years = $48

Stock Price today = 48/(1.14)³

Stock Price today = $32.40

jeff jeffy answered 2 years ago
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