Fred Flintlock Wants to Earn a Total of 10% on His

Multiple Choice

Fred Flintlock wants to earn a total of 10% on his investments. He recently purchased shares of ABC stock at a price of $20 a share. The stock pays a $1 a year dividend. The price of ABC stock needs to _____ if Fred is to achieve his 10% rate of return.

A) remain constant
B) decrease by 5%
C) increase by 5%
D) increase by 10%
E) increase by 15%