CFA Level 1: Stock Value Calculation

Stock Value Calculation

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Question

If a stock that you are holding for one year has an estimated dividend payout of $2.50 and an expected sale price of $43, what is the value of the stock?

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Explanations

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A. B. C. D.

D

To determine the value of a stock held for one year, it is necessary to estimate the dividend to be received during the period, the expected sale price at the end of the period and its required rate of return. The required rate of return in this case is not given.