You are considering the purchase of Diana Company stock. You anticipate that the company will pay dividends of $3.50 per share next year and $4.00 per share the following year. You believe that you can sell the stock for $20.00 per share two years from now. If your required rate of return is 10 percent, what is the maximum price that you would pay for a share of Diana Company stock?

Answer rating: 100% (QA)

1750 Explanation The present value of the stock price two ... View the full answer