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    Stock Values. Integrated Potato Chips

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    Stock Values. Integrated Potato Chips paid a $1 per share dividend yesterday. You expect the dividend to grow steadily at a rate of 4 percent per year

    What is the expected dividend in each of the next 3 years?
    If the discount rate for the stock is 12 percent, at what price will the stock sell?
    What is the expected stock price 3 years from now?
    If you buy the stock and plan to hold it for 3 years, what payments will you receive?
    What is the present value of those payments? Compare your answer to (b).

    done in excel spread sheet with complete formula for each question

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    Solution Preview

    Kao-wen Peng

    What is the expected dividend in each of the next 3 years?
    Year 0 Year 1 Year 2 Year 3
    expected dividend 1 1.04 1.08 1.12

    If the discount rate for the stock is 12 percent, at what price will the stock sell?

    We can find the appropriate stock ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer what is the expected dividend in each of the next 3 years?
    If the discount rate for the stock is 12 percent, at what price will the stock sell, what is the expected stock price 3 years from now, what payments will you receive, and what is the present value of those payments.

    $2.19

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