Question

You are trying to determine the appropriate price to pay for a share of common stock. if you purchase this stock, you plan to hold it for 1 year. at the end of the year you expect to receive a dividend of $2.50 and to sell the stock for $125. the appropriate rate of return for this stock is 10 percent. what should be the current price of this stock

Answer 1

Here are my workings:
The answer would be= 1250/11 OR 113.6363636


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