Opportunity Cost of Capital
Example - continued
The stock is trading for $95.65. Depending on the
state of the economy, the value of the stock at the
end of the year is one of three possibilities:
Stock Price $80 110 140
Economy Slump Normal Boom
Opportunity Cost of Capital
Example - continued
The stock is trading for $95.65. Depending on the
state of the economy, the value of the stock at the
end of the year is one of three possibilities:
Stock Price $80 110 140
Economy Slump Normal Boom