Suppose that you are willing to pay $450.33 today for a share of stock which you expect to sell at the end of one year for $500.25. 

If you require an annual rate of return of 15 percent, what should be the estimate of the amount of the annual dividend which you expect to receive by the end of Year 1 prior to the sale of the stock?

Assume that the estimated return equals the required rate of return.

Answer rating: 100% (QA)

To estimate the amount of the annual dividend you expect to receive we can use the dividend discount ... View the full answer