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