79% Sun 8:30 AM a mat hol.com Fin320_F1713 Test:Valuation Exam Time Remaining: 0

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79% Sun 8:30 AM a mat hol.com Fin320_F1713 Test:Valuation Exam Time Remaining: 00:59:36 Submit Test This Question: 1 pt 6 of 25 (3 complete) > This Test: 25 pts possibl Credenza Industries is expected to pay a dividend of $1.95 at the end of the coming year. It is expected to sell for $67 at the end of the year. If its equity cost of capital is 8%, what is the expected capital gain from the sale of this stock at the end of the coming year? O A. $4.96 O B. $63.84 OC. $3.16 D. S62.04 Click to select your answer d not

Explanation / Answer

C. $3.16

The expected capital gain from the sale of this stock at the end of the coming year is:

= $67 - [($1.95 + $67) / 1.08]

= $3.16

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