Question
3) You purchase 100 shares of stock for $40 a share. The stock pays a $2 per share dividend at year-end. a. What is the
3)
You purchase 100 shares of stock for $40 a share. The stock pays a $2 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) $38; (ii) $40; (iii) $46?(Leave no cells blank - be certain to enter "0" wherever required. Enter your answers as a whole percent.)
Stock priceRate of return$38%$40%$46%
b.What is your real (inflation-adjusted) rate of return if the inflation rate is 3%?(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 priceReal rate of return$38%$40%$46%
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