You Are Evaluating the Purchase of Holdings,Inc

question 44

Multiple Choice

You are evaluating the purchase of Holdings,Inc.common stock that just paid a dividend of $1.80,and the dividend will be $1.80 per share per year for the next ten years.You plan to hold the stock for three years and then sell it.You expect the price of the company's stock to rise to $51.50 at the end of your three-year holding period.You estimate that a required rate of return of 17.5% will be adequate compensation for this investment.Calculate the present value of the expected future stock price.Round to the nearest $.25.

• A)$64.00
• B)$55.25
• C)$31.75
• D)$103.00

---

Definitions:

Poll

A survey or inquiry into public opinion conducted by questioning a selected group of individuals.

Activities

Actions or tasks that individuals engage in for the purpose of recreation, leisure, or achieving certain objectives.

Past Month

Refers to the time period of roughly 30 days immediately preceding the present day.

Recreation Centre

A facility provided for leisure activities, which may include sports, games, and fitness programs.