You Are Considering Acquiring a Common Stock That You Would

question 118

Multiple Choice

You are considering acquiring a common stock that you would like to hold for one year.You expect to receive both $0.75 in dividends and $16 from the sale of the stock at the end of the year.The maximum price you would pay for the stock today is _____ if you wanted to earn a 12% return.

• A)$23.91
• B)$14.96
• C)$26.52
• D)$27.50
• E)none of the above