Question: Can someone explain how ' 1+r ' becomes 2? Question 7 Jumbuck Exploration has a current stock price of $2.00 and is expected to sell

Can someone explain how ' 1+r ' becomes 2?

Question 7 Jumbuck Exploration has a current stock price of $2.00 and is expected to sell for $2.10 in one year's time, immediately after it pays a dividend of $0.26. Which of the following is closest to Jumbuck Exploration's equity cost of capital? A. 9% B. 12% PV = Div1+P1 (C.) 18% 2 = D. 22% 1 = 0.18 1+r 0.26+2.10 1+r 0.26+2.10 r = 2

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