Question: Gamecock Company’s common stock is currently selling for $30
- (a) Gamecock company’s common stock is currently selling for $30 dollars per share. It is expected to be selling for $31.50 per share by the end of the year. The stock is expected to pay a dividend of $0.60 per share. Compute the expected rate of return on this stock.
(b) If you as an investor require an 8.5% total return, would you purchase the stock?
(c) At what price would you be willing to purchase the stock?