Discount rate to be utilized in evaluating the share

Reference no: EM133430511

Question: You are considering the purchase of a common share of Opco Inc. This is a short-term Investment, as your investment timeline is 1 year. Your analysis leads you to conclude the following:

the share will sell at $100.00 at the end of Year I; While there is no fixed dividend rate attached to the share, you expect the share will
pay a Dividend of $2.5/share at the end of Year I, and,

I . A rate of 6% IS a proper discount rate to be utilized in evaluating the share.

Required: Given the above information, how much would you be willing to buy

Reference no: EM133430511

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