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boland boland
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Posts: 1892
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7 years ago
Benny Simpson is considering an investment in Pontoon Industries Inc. He anticipates a dividend of $0.50 next year and an increase in the stock price from the current price of $18.25 per share to $20 per share. If he plans to hold the stock for one year, should Mr Simpson buy the stock if he requires an annual return of 12% on similar-risk investments?
A) no, because his anticipated return of 9.59% is exceeded his required return of 12%
B) no, because his anticipated return of 2.74% is exceeded his required return of 12%
C) yes because his anticipated return of 12.33% exceeds his required return of 12%
D) There is not enough information to answer this question.
Textbook 
Fundamentals of Multinational Finance

Fundamentals of Multinational Finance


Edition: 5th
Authors:
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noxx53noxx53
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7 years ago
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boland Author
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7 years ago
Upwards Arrow Perfection
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7 years ago
You're welcome Wink Face
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