Your friend just won the lottery. He has a choice of receiving $50,000 a year for the next 20 years or a lump sum today. The lot
1 answer:
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Answer:
Expected rate of return will be 24%
So option (b) will be correct option
Explanation:
We have given dividend in next year will be $2
So dividend $
Current stock price = $50
And it is given that in next year stock price is $60
So growth rate = 20%
We have to find the expected return after 12 month, that is after 1 year
We know that current price is given by
= 24%
So expected rate of return will be 24%
So option (B) will be correct option