5. A share of LinkedIn, Inc. stock is expected to pay a dividend of $1.20 in...

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Answer 1

Answer #1

5


Stock
Discount rate	0.12
Year	0	1	2	3
Cash flow stream	0	1.2	1.44	36.2
Discounting factor	1	1.12	1.2544	1.404928
Discounted cash flows project	0	1.071429	1.147959	25.76644
NPV = Sum of discounted cash flows
NPV Stock =	27.99
Where
Discounting factor =	(1 + discount rate)^(Corresponding period in years)
Discounted Cashflow=	Cash flow stream/discounting factor

Answer 2

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