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Good investment at the current price

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Reference no: EM131114254

The stock of Tips, Inc., a new firm operating a chain of sports betting parlors, has just been sold in an initial public offering at a price of $25 per share. One week after this offering, the stock has risen in value to $35. You believe the stock will rise to $45 over the coming year. You do not expect Tips to pay any dividends over the year. If you require a rate of return on this stock of 18 percent, do you believe this is a good investment at the current price of $35?

Reference no: EM131114254

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