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Suppose you expect Longs Drug Stores to pay an annual dividend of $5 per share in the coming year and to trade $37 per share
Suppose you expect Longs Drug Stores to pay an annual dividend of $5 per share in the coming year and to trade $37 per share at the end of the year. If investments with equivalent risk to Longs' stock have an expected return of 5%, what is the most you would pay today for Longs' stock?
| A. | $38.00 | |
| B. | $42.00 | |
| C. | $40.00 | |
| D. | $36.00 |
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