Toyota stock has the following probability distribution of expected prices one year from now:

If you buy Toyota today for $55 and it will pay a dividend during the year of $4 per share, what is your expected holding-period return on Toyota?

A. 17.72%

B. 18.89%

C. 17.91%

D. 18.18%

Transcribed Image Text:

State 1 2 3 Probability 25% 40% 35% Price $50 $60 $70 State 1 2 3 Probability 25% 40% 35% Price $50 $60 $70

Answer rating: 100% (QA)

Expected price of the stock 025 50 04 6... View the full answer