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Diets For You announced today that it will begin paying annualdividends next year. The first dividend will be $1.25 a share. Thefollowing dividends will be $0.25, $0.25, $0.50, and $0.75 a shareannually for the following 4 years, respectively. At the end of thefifth year, the stock could be sold for $18. How much are youwilling to pay to buy one share of this stock today if your desiredrate of return is 8.5 percent?

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Beverley Smith
Beverley SmithLv2
28 Sep 2019

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