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3. Von Bora Corporation is expected to pay a dividend of $1.40 per share at the end of this year and a $1.50 per share

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3. Von Bora Corporation is expected to pay a dividend of $1.40 per share at the end of this year and a $1.50 per share at the end of the second year. You expect Von Bora's stock price to be $25.00 at the end of two years. Von Bora's equity cost of capital is 10%. Suppose you plan on purchasing Von Bora stock in one year, right after the $1.40 dividend is paid. You then plan on selling your stock at the end of year two, right after the $1.50 dividend is paid. The dividend yield that you will receive on your investment is closest to: (a) 5.75% (b) 6.50% (c) 6.25% (d) 4.00% (e) 4.50%

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