Gamecock Company’s common stock is currently selling for $30

jagguarpaw January 10, 2017 0 Comments

Question: Gamecock Company’s common stock is currently selling for $30

  1. (a) Gamecock company’s common stock is currently selling for $30 dollars per share. It is expected to be selling for $31.50 per share by the end of the year. The stock is expected to pay a dividend of $0.60 per share. Compute the expected rate of return on this stock.

(b) If you as an investor require an 8.5% total return, would you purchase the stock?

(c) At what price would you be willing to purchase the stock?