Leonardo's broker called him recently with an offer to buy Downliner Waterproof Furnishings Corp.common stock for $40 per share.His broker promised to repurchase the shares in one year for $45 per share.If Leonardo accepts this deal,what is his required return? The stock is not expected to pay a dividend next year.
A) 15.3%
B) 10.0%
C) 30.6%
D) 15.1%
E) 12.5%
Correct Answer:
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