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1. You are thinking of purchasing the stock of Ajax co. You expect it to pay a $2.20 dividend in one year, and you

1. You are thinking of purchasing the stock of Ajax co. You expect it to pay a $2.20 dividend in one year, and you believe that you can sell the stock for $23 at that time. a) If you require a return of 10% on investments of this risk, what is the maximum you would be willing to pay? b) If you decide to hold the stock for two years, and you expect a dividend of $3.5 in two years and a stock price of $25.10 at the end of year 2. how much would you be willing to pay?

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