Chapter 9
is the present value as of t = 3 of the dividends in year 4 and beyond. with the cash flows for d1, d2, d3, and shown on the time line, we discount each value back to year 0, and the sum of these four pvs is the value of the stock today, p0 = $54.109. the dividend yield in year 1 is 4… ................
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