Question: A Moving to another question will save this response. Question 2 of 4 >>> Question 2 7 points Save Answer You would like to buy

 A Moving to another question will save this response. Question 2

A Moving to another question will save this response. Question 2 of 4 >>> Question 2 7 points Save Answer You would like to buy two stocks. Both stocks have a required return of 10%. Stock A will pay forever a constant semiannual dividend of $ 2 while stock B has an expected dividend of $ 1.5 and the dividends will be growing with a fixed rate of 3%. 1- Compute the current values of the stocks A and B (2 Marks) 2- Explain briefly, with your own words, the difference between these two types of stocks (2 Marks) 3- If you will decide to postpone your purchase to year 4, how much you will be willing to pay for the stock A and stock B (3 Marks) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BI S Paragraph Arial 10pt E I XA Q a se v . V O WORDS POWERED BY TINY P LOS re 5 4 % 5 6 3 Y 1 Y TOS T R W Q E ya 7 L K

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