Question: Exercise 6: Consider three investors: a. Mr. Single invests for one year. b. Ms. Double invests for two years. c. Mrs. Triple invests for

Exercise 6: Consider three investors: a. Mr. Single invests for one year. b. Ms. Double invests for two years. c. Mrs. Triple invests for three years. Company Z's earnings and dividends per share are expected to grow indefinitely by 2% a year. The next year's dividend is $7, and the cost of equity is 5%. Assume each invests in company Z. What is the expected rate of return for each of these investors?

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