You expect a share of EconNews.Com to sell for $71 a year from now and to pay a $3 dividend per share in one year. What should you pay (rounded to the nearest dollar) for the stock today if you require an 6 percent return? You expect a share of EconNews.Com to sell for $71 a year from now and to pay a $3 dividend per share in one year. What should you pay(rounded to the nearest dollar) for the stock today if you require an 6 percent return?Multiple Choice$75$70$67$78

The formula used - PW of selling price + PW of dividend Here, PW of selling price = 71/ (1+i) PW of…

You expect a share of EconNews.Com to sell for $71 a year from now and to pay a $3 dividend per share in one year. What should you pay (rounded to the nearest dollar) for the stock today if you require an 6 percent return? Multiple Choice $75 $70 $67 $78

You expect a share of EconNews.Com to sell for $71 a year from now and to pay a $3 dividend per share in one year. What should you pay (rounded to the nearest dollar) for the stock today if you require an 6 percent return? Multiple Choice $75 $70 $67 $78

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.2IP

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You expect a share of EconNews.Com to sell for $71 a year from now and to pay a $3 dividend per share in one year. What should you pay
(rounded to the nearest dollar) for the stock today if you require an 6 percent return?
Multiple Choice
$75
$70
$67
$78

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