Answer:
$1,534.372
Explanation:
The computation of the expected level of the index in one year is shown below:
= Current index level × 1 + expected rate of return on the market - expected future value of the dividend paid over the next year
= $1,433 × (1 + 8.4%) - $19
= $1,553.372 - $19
= $1,534.372
We simply applied the above formula so that the expected level of the index in one year could come
Tough.. Just write a little stick figure guy saying I dunno. :) Hope I helped!
The answer & explanation for this question is given in the attachment below.
