We buy XYZ shares at $25 each. After 1 year, XYZ will pay us a $1/share dividend — IF it survives until then. And each year XYZ survives, it will raise its dividend 10%. But any given year, XYZ has a 5% chance of going under. What’s our probability of breaking even or better?
26% < 25%
32% >= 25%, < 50%
20% >= 50%, < 75%
22% >= 75%
1,840 votes • Final results
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Replying to @10kdiver
Thanks for this new interesting brain teaser! Looking forward solving the next. And the next. 😁

Nov 27, 2021 · 3:52 PM UTC

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Your sum should start from 0.
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Indeed. That’s a writing error but the computation does imply a start at 0