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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

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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
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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