Use the Information for the Question(s)below

question 78

Multiple Choice

Use the information for the question(s) below.
Von Bora Corporation is expected to pay a dividend of $1.40 per share at the end of this year and a $1.50 per share at the end of the second year.You expect Von Bora's stock price to be $25.00 at the end of two years.Von Bora's equity cost of capital is 10%.
-The price you would be willing to pay today for a share of Von Bora stock,if you plan to hold the stock for two years is closest to:

• A)$23.15.
• B)$20.65.
• C)$21.95.
• D)$21.90.

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Definitions:

Price Fixing

An illegal agreement among competitors to control the price of a product or service.

Sherman Act

A landmark federal statute in the field of antitrust law prohibiting monopolistic practices and promoting competition.

Sherman Act

A foundational United States antitrust law passed in 1890 aiming to prohibit monopolies and promote competition in the marketplace.

Clayton Act

A U.S. law enacted in 1914 aimed at promoting competition and preventing antitrust practices.