Question
ABC Co. is expected to pay a $2.00 dividend next year. The shares normally trade at a current yield of 5%. If an investor requires
ABC Co. is expected to pay a $2.00 dividend next year. The shares normally trade at a current yield of 5%. If an investor requires a 15% return on ABC Co. shares, how much would the investor be willing to pay for the stock?
Select one:
a. $47.52
b. $38.75
c. $36.52
d. $40.00
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Management and Cost Accounting
Authors: Alnoor Bhimani, Charles T. Horngren, Srikant M. Datar, George Foster
4th edition
978-1405888202
