You want to invest in a stock that pays $5.00 annual cash dividends for the next four years. At the end of the four years, you will sell the stock for $20.00. If you want to earn 12% on this investment, what is a fair price for this stock if you buy it to
A) $40.00
B) $43.90
C) $27.90
D) $25.42
Answer: C
Explanation: C) N = 4, I/Y = 12, PMT = -5, FV = -20, Answer, PV = $27.90
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