3. An investor plans to buy a stock for $165 and keep it for 8 years. This stock pays $10/share dividend per year (Dividend=amount of profits that the company that sells the stock pays to the...

Extracted text: 3. An investor plans to buy a stock for $165 and keep it for 8 years. This stock pays $10/share dividend per year (Dividend=amount of profits that the company that sells the stock pays to the stockholders every year). There are 3 equally likely outcomes of the sale price of this stock after the 8 years: Comppany will do very well and the stock will sell for $245. Compnay will in essense maintain its value and the stock will sell for the same as purchase price (i.e., $165) Company will do poorly and its stock value will drop to $145. Compute the internal rate of return for each of the 3 scenarios and its average value.