What Is the Maximum Price Erica Should Pay for Rangoon

question 57

Multiple Choice

What is the maximum price Erica should pay for Rangoon Corp.common stock if her required return is 5% and she expects to sell the stock in one year for $50 per share,immediately after she receives a $.50 per share dividend? (Round to the nearest tenth.)

• A) $50.00
• B) $48.10
• C) $48.00
• D) $45.00
• E) $40.73

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