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Cheng is considering an investment in Chos Chinese Restaurant. Cheng is planning to buy the...

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Accounting

Cheng is considering an investment in Chos Chinese Restaurant. Cheng is planning to buy the stock today, hold it for 3 years, and then expects to sell the stock for $40 at the end of 3 years. Cheng expects the first dividend to be $1.00, the second dividend to be $1.50, and the third dividend to be $2.25. If Cheng requires a 17% rate of return, what is the value of Chos Chinese Restaurant to Cheng today?

$28.33

$26.93

$13.24

$24.70

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