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Calculate the price of a stock that has a one-period horizon, is expected to pay a dividend of $.10 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 $.10 per share for the period, with the following prices and associated probabilities forecast at the end of the period:
Probability | 0.2 | 0.15 | 0.25 | 0.3 | 0.1 |
Price | $15 | $18 | $21 | $23 | $25 |
The return on comparable stocks is 7%.
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