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Q. |
Bill, Jim, and Shelly are all interested in buying the same stock that pays dividends. Bill plans on holding the stock for 1 year. Jim plans on holding the stock for 3 years. Shelly plans on holding the stock until she retires in 10years. Which one of the following statements is correct? |
A. | Bill will be willing to pay the most for the stock because he will get his money back in 1 year when he sells. |
B. | Shelly should be willing to pay the most for the stock because she will hold it the longest and hence will get the most dividends. |
C. | All three should be willing to pay the same amount for the stock regardless of their holding period. |
D. | None of these |
Answer» C. All three should be willing to pay the same amount for the stock regardless of their holding period. |
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