Multiple Choice
Julian is considering purchasing the stock of Pepsi Cola because he really loves the taste of Pepsi. What should Julian be willing to pay for Pepsi today if it is expected to pay a $2 dividend in one year and he expects dividends to grow at 5 percent indefinitely? Julian requires a 12 percent return to make this investment.
A) $28.57
B) $29.33
C) $31.43
D) $43.14
Correct Answer:
Verified
Correct Answer:
Verified
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