Suppose you are thinking of purchasing the stock of Moore Oil, Inc. and you expect it to pay a $2 dividend in year one and you believe that you can sell the stock for $14 at that timeat the end of that 1 year. If you require a return of 20% on investments of this risk, what is the maximum you would be willing to pay? 0|--------x|-------|

Compute the PV of the expected cash flows