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dividends are 10,5,6,8, 10 with 5 years. interest rate is 12. what is the future value...

dividends are 10,5,6,8, 10 with 5 years. interest rate is 12. what is the future value of the stock

Solutions

Expert Solution

Future value of stock = Sum [ Cash flow * FVF(r%, n) ]

Year Bal Yrs Cash flow FVF @12% FV of CFs
1 4 $   10.00     1.5735 $   15.74
2 3 $      5.00     1.4049 $      7.02
3 2 $      6.00     1.2544 $      7.53
4 1 $      8.00     1.1200 $      8.96
5 0 $   10.00     1.0000 $   10.00
FV of CFs $   49.25

Future Value of stock is $ 49.25

jeff jeffy answered 1 year ago
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