Valuing a share of a stock (P) that pays a dividend and you expect to hold it for one period: Assume you expect the dividend to be $1 in one year (not right away, but wait one year out). You expect to sell/receive $18 for one share of this stock in one year. You have a required return of 10% (for investments of similar risk). How much should you pay for this one share? $18.18 $25.71 $17.27 None of the above
Valuing a share of a stock (P) that pays a dividend and you expect to hold it for one period: Assume you expect the dividend to be $1 in one year (not right away, but wait one year out). You expect to sell/receive $18 for one share of this stock in one year. You have a required return of 10% (for investments of similar risk). How much should you pay for this one share? $18.18 $25.71 $17.27 None of the above
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 12P
Related questions
Question
Am. 114.
![Valuing a share of a stock (P) that pays a dividend and you expect to hold it for one
period:
Assume you expect the dividend to be $1 in one year (not right away, but wait one
year out).
You expect to sell/receive $18 for one share of this stock in one year.
You have a required return of 10% (for investments of similar risk).
How much should you pay for this one share?
$18.18
$25.71
$17.27
None of the above](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9de36470-ed10-4c17-bc39-0dcf870ff473%2Fe550e727-0a64-41b7-94fe-52c93194665d%2Fvax1hx_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Valuing a share of a stock (P) that pays a dividend and you expect to hold it for one
period:
Assume you expect the dividend to be $1 in one year (not right away, but wait one
year out).
You expect to sell/receive $18 for one share of this stock in one year.
You have a required return of 10% (for investments of similar risk).
How much should you pay for this one share?
$18.18
$25.71
$17.27
None of the above
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