Question: Assume interest rates are 10% Problem 1. You expect a stock to pay the following dividends in the future: 1 $1 2 $2 3 $4.20

Assume interest rates are 10% Problem 1. You expect a stock

Assume interest rates are 10%

Problem 1. You expect a stock to pay the following dividends in the future: 1 $1 2 $2 3 $4.20 4 $3.15 After year 4, you expect the dividend to stay constant or the year 4 value forever The terminal value is: The terminal value is true at time The PV of the terminal value is The PV of all the expected future CFs from the stock is

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