Three-Period Example Finally,what if you decide to hold the stock for three periods?In addition to the dividends at the end of years 1 and 2,you expect to receive a dividend of $2.205 and a stock price of $15.435 both at the end of year 3.Now how much would you be willing to pay? ·PV=2/1.2+2.10/(1.2)2+(2.205+15.435)/(1.2)3 =13.33 OrCF0=0;C01=2;F01=1;C02=2.10;F02=1; C03=17.64;F03=1;NPV;I=20;CPT NPV= 13.33 66 Three-Period Example n Finally, what if you decide to hold the stock for three periods? In addition to the dividends at the end of years 1 and 2, you expect to receive a dividend of $2.205 and a stock price of $15.435 both at the end of year 3. Now how much would you be willing to pay? § PV = 2 / 1.2 + 2.10 / (1.2)2 + (2.205 + 15.435) / (1.2)3 = 13.33 § Or CF0 = 0; C01 = 2; F01 = 1; C02 = 2.10; F02 = 1; C03 = 17.64; F03 = 1; NPV; I = 20; CPT NPV = 13.33