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Question 1 1 pts DEF Industries will pay a regular dividend of $3.05 per share for each of the next 4 years. At the end of th

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Answer #1
Stock
Discount rate 0.0693
Year 0 1 2 3 4
Cash flow stream 0 3.05 3.05 3.05 40.05
Discounting factor 1 1.0693 1.143402 1.22264 1.3073693
Discounted cash flows project 0 2.852333 2.667477 2.494601 30.634038
NPV = Sum of discounted cash flows
NPV Stock = 38.65
Where
Discounting factor = (1 + discount rate)^(Corresponding period in years)
Discounted Cashflow= Cash flow stream/discounting factor
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