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coolcat coolcat
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4 years ago
Valorous Corporation will pay a dividend of $1.80 per share at this year's end and a dividend of $2.40 per share at the end of next year. It is expected that the price of Valorous' stock will be $44 per share after two years. If Valorous has an equity cost of capital of 8%, what is the maximum price that a prudent investor would be willing to pay for a share of Valorous stock today?

▸ $42.40

▸ $41.45

▸ $40.22

▸ $39.27
Textbook 
Fundamentals of Corporate Finance

Fundamentals of Corporate Finance


Edition: 2nd
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JlynnJlynn
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coolcat Author
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4 years ago
Thank you
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