You Have Decided That You Would Like to Own Some

question 324

Multiple Choice

You have decided that you would like to own some shares of Martin & Miller (M&M) but need an expected 15% rate of return to compensate for the perceived risk of such ownership. What is the maximum you are willing to spend today to buy one share of M&M stock if the company pays a constant $3 annual dividend per share?

• A) $15.00
• B) $16.25
• C) $17.50
• D) $18.75
• E) $20.00