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You are evaluating the purchase of Holdings, Inc. common stock that just paid a dividend of $1.80, and the dividend will be $1.80 per share per year for the next ten years. You plan to hold the stock for three years and then sell it. You expect the price of the company's stock to rise to $51.50 at the end of your three-year holding period. You estimate that a required rate of return of 17.5% will be adequate compensation for this investment. find out the present value of the expected future stock price.

A) $64.00

B) $55.25

C) $31.75

D) $103.00

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M939370

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