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Accounting

Problem:

Credenza Industries is expected to pay a dividend of $1.20 at the end of the coming year. It is expected to sell for $62.00 at the end of the year.

Required:

Question: If its equity cost of capital is 8%, what is the expected capital gain from the sale of this stock at the end of the coming year?

a) 14.28

b) 58.52

c) 4.86

d) 3.48

Note: Show all workings.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91169753

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