# You observe Golden Flashes Common Stock selling for $40.00 per share.

### Question Description:

You observe Golden Flashes Common Stock selling for $40.00 per share. 1 answer below ยป You observe Golden Flashes Common Stock selling for $40.00 per share. The next dividend is expected to be $4.00, and is expected to grow at a 5% annual

rate forever. If your required rate of return is 12%, should you purchase the stock? a. Yes, because the present value of the expected future cash flows is less than $40. b. No, because the present value of the expected future cash flows is less than $40. c. No, because the present value of the expected future cash flows is greater than $40. d. Yes, because the present value of the expected future cash flows is greater than $40. Dec 10 2013 05:52 PM