Suppose you are thinking of purchasing the stock of Moore Oil, Inc. You expect it to pay a $2.2 dividend in one year, and you require a return of 10% on investments of this risk. In addition to the dividend in one year, you expect a dividend of $2.40 in two years and a stock price of $14.60 at the end of year 2. Now how much would you be willing to pay?
a. $15
b. $14
c. $10
d. $11
e. $12
f. $13
g. $16
h. $17
i. $18
Answers: 3
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Suppose you are thinking of purchasing the stock of Moore Oil, Inc. You expect it to pay a $2.2 divi...
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