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Business, 21.04.2020 15:33 shartiarahoward

Valorous Corporation will pay a dividend of $2.00 per share at this year's end (at t = 1) and a dividend of $2.50 per share at the end of next year (at t = 2). It is expected that the price of Valorous' stock will be $50 per share after two years (at t = 2). 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?

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Valorous Corporation will pay a dividend of $2.00 per share at this year's end (at t = 1) and a divi...
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