If the price is ₹ 300 and the dividend is ₹ 30, what should be the price at which one should sell the…
The required selling price is ₹ 390. Using \(r=(D+P_1-P_0)/P_0\), we obtain \(0.40=(30+P_1-300)/300\), hence \(P_1=300+120-30=390\).
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If the price is ₹ 300 and the dividend is ₹ 30, what should be the price at which one should sell the stock at the end of one year in order to obtain a rate of return of 40% ?
Answer and explanation
Correct answer A
The required selling price is ₹ 390. Using , we obtain , hence .
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Maharashtra and Goa SET (MH SET)