Question

Melissa Cutt is thinking about buying some shares of EZLawn​ Equipment, at $ 46.26 per share....

Melissa Cutt is thinking about buying some shares of EZLawn​ Equipment, at $ 46.26 per share. She expects the price of the stock to rise to $ 48.34 over the next 3 years. During that time she also expects to receive annual dividends of $ 5.59 per share.

a. What is the intrinsic worth of this​ stock, given a required rate of return of 11%​?

b. What is its expected​ return?

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