A stock paying $5 in annual dividends currently sells for $80 and has an expected return of 14%. What might investors expect to pay for the stock one year from now?
A) $82.20
B) $86.20
C) $87.20
D)$91.20

Name: A stock paying $5 in annual dividends currently sells for $80 and has an expected return of 14%. What might investors expect to pay for the stock one year from now? A) $82.20 B) $86.20 C) $87.20 D)$91.20
Brand: Quizplus
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Question

Quizplus · Accepted Answer

.14 = (P₁ + $5 - 80)/$80P₁ = $86.20

A Stock Paying $5 in Annual Dividends Currently Sells for $80