How much should you be willing to pay for stock today

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Reference no: EM131593073

Assume that you plan to buy a share of IBM stock today and to hold it for 2 years. Your expectations are that you’ll receive a dividend of 19.00 at the end of Year 1 and a dividend of $19.25 at the end of Year 2. In addition, you expect to sell the stock for $150 at the end of Year 2. If your expected rate of return is 11 percent, how much should you be willing to pay for this stock today?

Reference no: EM131593073

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