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Conceptual Overview: Explore how the value of a stock changes as a function of the discount interest rate. - $1.15 and an ant1. If rs increases to 10%, what would be the value of the constant growth stock? (Note: Do is $1.15 and the expected constant3. Move the slider so that rs is 12%. If the stock were selling on the market for $15.50, would you buy it? (Note: Do is $1.1

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Answer #1

P0=D0*(1+g)/(r-g)

1.
=1.15*1.04/(10%-4%)
=19.9333

2.
Option B

3.
Option B

=1.15*1.04/(12%-4%)
=14.9500

4.
Option C

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