Zephyr Inc. sells wind based systems for generating electricity

The company pays no dividends, but you estimate the stock will be worth $50 per share 5 years from now and you require a 15% rate of return for stock investments of this type. What price should you be willing to pay for this stock?
A) $12.50
B) $24.86
C) $43.48
D) $57.50


Answer: B

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