Answer: a. $58
Explanation:
Your required return in dollars is;
= 16% * 52
= $8.32
Return = Dividend + Capital appreciation.
8.32 = 2.40 + Capital appreciation
Capital appreciation = 8.32 - 2.40
= $5.92
The stock would have to increase by $5.92 to get your required return;
= 52 + 5.92
= $57.92
= $58
