61. Upper Crust Bakers just paid an annual dividend of $2.80 a share and is expected to increase that amount by 4 percent per year. If you are planning to buy 1,000 shares of this stock next year, how much should you expect to pay per share if the market rate of return for this type of security is 11.50 percent at the time of your purchase? A. $37.33 B. $38.16 C. $38.83 D. $40.38 E. $42.00

Question
61. Upper Crust Bakers just paid an annual dividend of $2.80 a share and is expected to increase that amount by
4 percent per year. If you are planning to buy 1,000 shares of this stock next year, how much should you expect
to pay per share if the market rate of return for this type of security is 11.50 percent at the time of your
purchase?
A. $37.33
B. $38.16
C. $38.83
D. $40.38
E. $42.00
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Discounted Cash Flow Analysis

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Transcribed Image Text

61. Upper Crust Bakers just paid an annual dividend of $2.80 a share and is expected to increase that amount by 4 percent per year. If you are planning to buy 1,000 shares of this stock next year, how much should you expect to pay per share if the market rate of return for this type of security is 11.50 percent at the time of your purchase? A. $37.33 B. $38.16 C. $38.83 D. $40.38 E. $42.00