What price would an investor be expected to pay

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Reference no: EM13273146

A stock is expected to pay $0.80 per share every year indefinitely. If the current price of the stock is $18.90, and the equity cost of capital for the company that released the shares is 6.4%, what price would an investor be expected to pay per share five years into the future?

a.
$22.65
b.
$20.43
c.
$21.23
d.
$12.50

Reference no: EM13273146

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