You purchase 1000 shares of a stock each year for five years. Assume that in the first year the stock price is $20 per share and the shares increase in price by 1% per year.
(a) What is the value of your investment in five years?
(b) If the same company provides annual dividends equal to 3% of stock price, calculate the amount of dividends that an investor will attain over this five-year period.
(c) If a company provides a DRIP that allows investors to acquire stocks with the annual dividend of 3% at a discounted price of 5% below market price, calculate the value of the investment after five years.