Question
ABC, Inc., common stock has a current marketprice of $52 per share. Dividends have been $5 a share for several years and are expected to
ABC, Inc., common stock has a current marketprice of $52 per share. Dividends have been $5 a share for several years and are expected to remain at that level for the foreseeable future. Other companies of similar risk and characteristics yield 10% in the marketplace. What should you recommend concerning ABC stock? Question 5 options: a) It should be purchased at $52 per share, because that is a fair price. b) It should be purchased at $52 per share, because it will yield 10.1%. c) It should not be purchased, because it will yield only 2%. d) It should not be purchased at more than $50 per share.
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