Use the following information to answer the question(s) below.
Nielson Motors has a share price of $50.00. Its dividend was $2.50, and you expect Nielson Motors to raise its dividend by approximately 6% per year in perpetuity.
-Vacinox is a biotechnology firm that is about to announce the results of its clinical trials of a potential new vaccine.If the trials are successful,Vacinox stock will be worth $80 per share.However,if the trials are not successful,then Vacinox stock will only be worth $12 per share.If on the morning that the announcement is schedule,Vacinox stock is trading for $60.96,then the probability that investors place on the trials being successful are closest to:
A) 48%
B) 50%
C) 60%
D) 72%

Question

Quizplus · Accepted Answer

D) price = (p)success + (1 - p)fail = 60.96 = p(80) + (1 - p)12 → 68p = 48.96 → p = .72

Use the Following Information to Answer the Question(s) Below