Suppose You Plan to Hold a Stock for One Year

question 117

Multiple Choice

Suppose you plan to hold a stock for one year.You expect that,in one year,it will sell for $30 and pay a dividend of $3 per share.If your required return on equity is 10%,what is the most you should be willing to pay for the share today?

• A) $3.30
• B) $23
• C) $30
• D) $33

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Definitions:

Creativity

The capacity to create or identify concepts, options, or opportunities that can assist in problem-solving, effective communication, and providing entertainment to oneself and others.

Unjustified Negative Attitude

An unfavorable opinion or feeling formed beforehand or without knowledge, reason, or consideration of the facts.

Prejudice

A preconceived opinion or judgment made without adequate knowledge or examination of the facts, often based on stereotypes.

Ethnic Minority Status

Refers to the classification of individuals who belong to groups with distinct cultural, racial, or national backgrounds that are smaller in number compared to the majority population within a society or country.