You Are Considering Acquiring a Common Stock That You Would

question 125

Multiple Choice

You are considering acquiring a common stock that you would like to hold for one year. You expect to receive both $2.50 in dividends and $28 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 15% return.

• A) $23.91
• B) $24.11
• C) $26.52
• D) $27.50
• E) None of the options are correct.

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