Question $16$ of $20$

This test $30$ point$($s$)$ possible

This question: $4$ point$($s$)$ possible

Suppose Acap Corporation will pay a dividend of $$2\mathrm{.}78$ per share at the end of this year and $$2\mathrm{.}97$ per share next year. You expect Acap's stock price to be $$5083$ in two years. If Acap's equily cosf of capital is $84\%$

a$.$ What price would you be willing to pay for a share of Acap stock today, if you planned to hold the stock for two years?

c$.$ Given your answer hlan to hold the stock for one year. What price would you expect to be able to sell a share of Acap stock for in one year?

Note: It is best not to round $($b$),$ what price would you be willing to pay for a share of Acap stock today, if you planned to hold the slock for one year? How does this compare to your answer in part $($a$)?q,$ a$.$ What price would you be willing to pay for a share of Acap stock today, if you planned to hold the stock, for two years?

The price you would be willing to pay. If you planned to hold the stock for two years, is $($Round to the nearest cent$)$

b$.$ Suppose instead you plan to hold the stock for one year. What price would you expect to be able to sell a share of Acap stock for in one year?

You would expect in one year to be able to sell an Acap share ats

$($Round to the hearest cent,

c$.$ Given your answer in part $($b$),$ what price would you be willing to pay for a share of Acap stock today, if you planned to hold the stock for pne year?

The price you would pay for an Acap share today is $5$

$($Round to the nearest cent$)$

How does this compare to your answer in part $($a$)?$

A$.$ You would be willing to pay more for a stock today if you planned to hold it for two years cather than one yeat

B$.$ The price you are walling to pay for the stock today is the same whether you plan to hold the stoch for one year on ho years

C$.$ You would pay tess for a stock today if you plan to hold it for two years instead of one year

D$.$ You would pay less for a stock iocay if you only plan to hold it for one year