An investor is considering investing in Tawari Company for one year.He expects to receive$2 in dividends over the year and feels he can sell the stock for$30 at the end of the year.To realize a return on the investment over the year of 14%,the price the investor would pay for the stock today is closest to:
A.$29
B.$28
C.$32
Answer:B
HPR=[Dividend+(Ending price−Beginning price)]/Beginning price
0.14=[2+(30−P)]/P
1.14P=32 so P=$28.07
