Based on the following information, what is the price at time 1 expected by investors for IWV stock? Assume that the stock is priced in equilibrium.

RF=.04

RM-RF=.08

Beta for the stock=1.5

E(D1)=$4

P0=$40

Select one:

a. $40.2

b. $42.4

c. $43.5

d. $41.5