$2$

$5$ points

You are considering buying the common stock of the Ford Motor Company. You think this is a good long$-$term opportunity, so you decided to hold it for five years. By then, you think the stock will be trading at $$25$ a share. In addition, Ford is expected to pay $$1\mathrm{.}25$ in dividends yearly.

What is the maximum price you would pay for the stock if you wanted to earn a $15\%$ return compounded annually?

$$13\mathrm{.}05$

$$21\mathrm{.}74$

$$15\mathrm{.}54$

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