You are considering 2 investment alternatives. The first is a stock that pays quarterly dividends of $0.25 per share and is trading at $30 per share; you expect to sell the stock in 6 months for $34. The second is a stock that pays quarterly dividends of $0.50 per share and is trading at $27 per share; you expect to sell the stock in 1 year for $30. Which stock will provide the better annualized holding period return?
Answer to relevant QuestionsAssume you invest $5,000 today in an investment that promises to return $9,000 in exactly 10 years. a. Use the present value technique to estimate the yield on this investment. b. If a minimum return of 9% is required, would ...Use a financial calculator or an Excel spreadsheet to estimate the yield for each of the following investments. Assuming you purchased a share of stock for $50 one year ago, sold it today for $60, and during the year received 3 dividend payments totaling $2.70, calculate the following. a. Income b. Capital gain (or loss) c. Total ...a. Determine the HPR for each stock in each of the preceding 10 years. Find the expected return for each stock, using the approach specified by Molly. b. Use the HPRs and expected return calculated in question a to find the ...How much should you be willing to pay for a lump sum of $10,000 five years from now if you can earn 3% every 6 months on other similar investments?
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