You purchase 100 shares of stock for $50 a share. The stock pays a $3 per...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You purchase 100 shares of stock for $50 a share. The stock pays a $3 per share dividend at year-end. a. What is the rate of return on your investment if the end-of-year stock price is (i) $47; (ii) $50; (iii) $53? (Leave no cells blank - be certain to enter "0" wherever required. Enter your answers as a whole percent.) Stock Price 47 50 53 Rate of Return % % % b. What is your real (inflation-adjusted) rate of return if the inflation rate is 5% ? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.) Stock Price 47 50 53 Real Rate of Return % % % You purchase 100 shares of stock for $50 a share. The stock pays a $3 per share dividend at year-end. a. What is the rate of return on your investment if the end-of-year stock price is (i) $47; (ii) $50; (iii) $53? (Leave no cells blank - be certain to enter "0" wherever required. Enter your answers as a whole percent.) Stock Price 47 50 53 Rate of Return % % % b. What is your real (inflation-adjusted) rate of return if the inflation rate is 5% ? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.) Stock Price 47 50 53 Real Rate of Return % % %
Expert Answer:
Answer rating: 100% (QA)
a i If the end of year stock price is 47 the total value of the investment would be 4700 47 100 Addi... View the full answer
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
Posted Date:
Students also viewed these finance questions
-
Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows: Q1 Q2 Q3 Q4 Sales $ 105 $ 90 $ 122 $ 140 Sales for the first quarter of the year after this one are projected...
-
The treasurer of Kelly Bottling Company (a corporation) currently has $200,000 invested in preferred stock yielding 10 percent. He appreciates the tax advantages of preferred stock and is considering...
-
Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows: Q2 Sales $175 S 195 $215 $245 Q1 Q3 Q4 Sales for the first quarter of the year after this one are projected at...
-
When dealing with a recession, governments may... a) increase spending b) raise taxes c) increase regulations d) decrease spending
-
The IRR is the true or actual rate of return being earned by the project. Do you agree or disagree? Discuss.
-
After extracting a trial balance for the year ended 31 December 2014: (a) There is a debit balance of $3500 on the telephone account and an unpaid bill covering the 3 months to 28 February 2015 of...
-
Describe an experiment, and give the necessary equations for measurement of the complex Young's modulus, \(E_{\mathrm{m}}^{*}\), of an isotropic matrix material.
-
Bonnie died on June 1, 2015, survived by her husband, Abner, and two sons, Carl and Doug. Bonnies only lifetime taxable gift was made in October 2013 in the taxable amount of $6.25 million. She did...
-
An incentive plan is useful for all companies, because it establishes an action protocol for those employees who have a margin for progression in the medium term. Although a fair salary is a sine qua...
-
A physics professor did daredevil stunts in his spare time. His last stunt was an attempt to jump across a river on a motorcycle (Fig. 3.51). The takeoff ramp was inclined at 53.0", the river was...
-
The Children's Shoe Company has 100 franchised locations and six regional offices. Each region is managed by a director who reports to the VP of Operations. In addition to the vice president of...
-
Characteristics of Competent Communicators . 1. SELF-AWARENESS Good communicators are aware of their own behavior and its effects on others - self-monitoring People who are high self-monitors pay...
-
I must make a storyboard of two rival companies such as sony and nintedo thinking of an announcement by Sony that the Playstation makes to surpass Nintendo that makes nintendo switch consoles for...
-
The specifications for machine parts are given with tolerance limits that describe a range of measurements for which the part is acceptable. Here x represents the length of a machine part, in...
-
The role of the manager in a global enterprise includes the ability to adapt to the political, legal, and cultural nuances of a global environment. As the global enterprise environment continues to...
-
1. Consider the incomplete combustion reaction that you observed with the butane lighter: C4H10(9) + 5 O2(g) 2 CO2(g) +5 H2O(g) + CO(g) + C(s) Assume that the butane is a gas at the time of...
-
Suppose we have the following table of yields on government benchmark bonds. Maturity Rate 2-year 2.9% 5-year 3.7% 10-year 4.1% 20-year 4.3% Suppose a 15.75 year corporate bond has a YTM of 8.79%....
-
Element compound homogeneous mixture (heterogeneous mixture) 4) A piece of gold has a mass of 49.75 g. What should the volume be if it is pure gold? Gold has a density of 19.3 g/cm (3 points) D=m/v...
-
Go back again to the first Hewlard Pocket balance sheet. Now assume that Pocket wins a lawsuit and is paid $100,000 in cash. The market value of the equity rises by that amount, and Pocket decides to...
-
Here are book- and market-value balance sheets of the United Frypan Company: Assume that MM's theory holds except for taxes. There is no growth, and the $40 of debt is expected to be permanent....
-
First National Bank pays 6.2% interest compounded semiannually. Second National Bank pays 6% interest compounded monthly. Which bank offers the higher effective annual interest rate?
-
Who was Jean-Baptiste Lamarck, and how did his ideas contrast with those of Darwin?
-
How did the earliest biblical scholars estimate Earths age?
-
What is the difference between archaeology and biological anthropology? Why is biological anthropology a subfield of anthropology?
Study smarter with the SolutionInn App