What Is the Most an Investor Would Be Willing to Pay

question 10

Multiple Choice

What is the most an investor would be willing to pay for a stock that will pay $210 next year and nothing before or after?

• A)$200 regardless of the interest rate.
• B)$200 if the interest rate is 5 percent per year.
• C)$190.91 if the interest rate is 10 percent per year.
• D)B and C.
• E)None of the above.

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