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Suppose you have some extra money to invest for 1 year. After a​ year, you will need to sell your investment to pay tuition. After listening to Bloomberg​, you decide that you want to buy Intel Corp. stock. You call your broker and find that Intel is currently selling for $ 50.09 per share and pays $ 0.15 per year in dividends. The analyst on Bloomberg predicts that the stock will be selling for $ 60.50 in 1 year. Assume that you would be satisfied to earn 11.8 % on the stock. Should you buy this​ stock?

Respuesta :

Answer:

The expected return on stock =

60.5+0.15-50.09=10.56

10.56/50.09=0.21= 21%

Yes We should buy this stock as its has an expected return of 21% and our required rate of return is 11.8%

Explanation:

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