Use the Information for the Question(s)below

question 62

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%.
-Suppose you plan to hold Von Bora stock for one year.The price one would expect to be able to sell a share of Von Bora stock for in one year is closest to:

• A)$26.50.
• B)$22.70.
• C)$23.15.
• D)$24.10.

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Definitions:

Probability

A measure of the likelihood that a specific event will occur, expressed as a number between 0 and 1.

Face Cards

Cards in a deck that depict a face, specifically the Jack, Queen, and King of each suit.

Probability

A measure of the likelihood of a particular event occurring, expressed as a number between 0 and 1.

Cards

Refers to thin pieces of plastic or paper, typically rectangular in shape, used for playing games, storing information, or performing transactions.