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How much should expect to pay per share

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Problem 1: ABC store just paid an annual dividend of $3.40 a share and is expected to increase that amount by 2.2 percent per year. If you are planning to buy 1,000 shares of this stock in two years, how much should you expect to pay per share if the market rate of return for this type of security is 14.8 percent at the time of your purchase?

Option 1: $28.80

Option 2: $29.18

Option 3: $29.83

Option 4: $27.58

Option 5: $29.89

Reference no: EM132832491

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