Question

This morning you purchased one share of stock for $44. The stock pays $3.20 per share...

This morning you purchased one share of stock for $44. The stock pays $3.20 per share each year as a dividend. What must the stock price be one year from now if you want to earn a total return of 13 percent for the year?

$46.52

$49.49

$51.67

$52.92

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Answer #1

Total return=(End value-Beginning value+Dividend)/Beginning value  

0.13=(End value-44+3.2)/44

(0.13*44)=End value-40.8

End value=5.72+40.8

=$46.52

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