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A stock is expected to pay a dividend of $\$ 6.2$ in two years and a $\$ 4.2$ in three years. You are hoping that you can sell it for $\$ 94$ at that time. If the required return is $9.6 \%$, what is the stock's value?

Answer:
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Step 1 ：The value of the stock is the present value of all future cash flows. In this case, the cash flows are the dividends and the selling price of the stock.

Step 2 ：We can calculate the present value of each cash flow by dividing it by \((1 + r)^t\), where \(r\) is the required return and \(t\) is the time in years until the cash flow is received.

Step 3 ：Given that the dividend in two years is \$6.2, the dividend in three years is \$4.2, the selling price is \$94, and the required return is 9.6\%, we can substitute these values into the formula.

Step 4 ：Calculating the present value of the dividends and the selling price, we get a total value of \$79.75 for the stock.

Step 5 ：Final Answer: The value of the stock is \(\boxed{79.75}\).