An investor is contemplating the purchase of common stock at the beginning of this year and to hold the stock for one year. The investor expects the year-end dividend to be P2.00 and expects a year-end price for the stock of P40. If this investor’s required rate of return is 10%, then the value of the stock to this investor is: Group of answer choices P34.88. P38.18. P33.06. P36.36.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 2P
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An investor is contemplating the purchase of common stock at the beginning of this year and to hold the stock for one year. The investor expects the year-end dividend to be P2.00 and expects a year-end price for the stock of P40. If this investor’s required rate of return is 10%, then the value of the stock to  this investor is: 

Group of answer choices 

P34.88. 

P38.18. 

P33.06. 

P36.36. 

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