Question
Calculate the price of a stock that has a one-period horizon, is expected to pay a dividend of $.20 per share for the period, with
Calculate the price of a stock that has a one-period horizon, is expected to pay a dividend of $.20 per share for the period, with the following prices and associated probabilities forecast at the end of the period:
| Probability | 0.3 | 0.1 | 0.2 | 0.3 | 0.1 |
| Price | $40 | $45 | $55 | $62 | $70 |
The return on comparable stocks is 8%.
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Applied Conic Finance
Authors: Dilip Madan, Wim Schoutens
1st Edition
1107151694, 978-1107151697
