Question: You own 100 000 worth of Smart Money stock One year
You own $100,000 worth of Smart Money stock. One year from now, you will receive a dividend of $2.25 per share. You will receive a $2.40 dividend two years from now. You will sell the stock for $65 per share three years from now. Dividends are taxed at the rate of 28 percent. Assume there is no capital gains tax. The aftertax required rate of return is 15 percent. How many shares of stock do you own?
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