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Question 62

Multiple Choice

Use the information for the question(s) below.
Von Bora Corporation is expected to pay a dividend of $1.40 per share at the end of this year and a $1.50 per share at the end of the second year.You expect Von Bora's stock price to be $25.00 at the end of two years.Von Bora's equity cost of capital is 10%.
-Suppose you plan to hold Von Bora stock for one year.The price one would expect to be able to sell a share of Von Bora stock for in one year is closest to:


A) $26.50.
B) $22.70.
C) $23.15.
D) $24.10.

Correct Answer:

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