13.3.1 - Show calculations QUESTION#2 If you buy shares in...

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TPL STOCK VALUATION You are considering buying shares in Transcanada Pipelines (“TPL”) that pays a $1.50 dividend per share at the end of each year. Four years from now you believe that you could sell the TPL stock for $45.00. You require an 8% rate of return. QUESTION #1: Would you buy the stock today for $35.00?
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Unformatted text preview: Show calculations. QUESTION #2 If you buy shares in TPL stock today for $35.00, receive the $2.50 dividend for 4 years and sell the stock for $35.00 in 3 years……would your rate of return be: CHECK ONE More than 8%? Less than 8%?...
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