Problem:
You are considering the purchase of a share of Blue Grass, Inc. common stock. You expect to sell it at the end of one year for $87 per share. You will also receive a dividend of $5.36 per share at the end of the next year.
Required:
Question: If your required return on this stock is 7.39 percent, what is the most you would be willing to pay for Blue Grass, Inc. common stock now?
Note: Please provide full description.