Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4 1.76points ItemSkipped Item 4 You purchase 100 shares of stock for $50 a share. The stock pays a $2 per share dividend at year-end.

4

1.76points

ItemSkipped

Item 4

You purchase 100 shares of stock for $50 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) $48; (ii) $50; (iii) $55? (Leave no cells blank - be certain to enter "0" wherever required. Enter your answers as a whole percent.)

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.)

4

1.76points

ItemSkipped

Item 4

You purchase 100 shares of stock for $50 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) $48; (ii) $50; (iii) $55? (Leave no cells blank - be certain to enter "0" wherever required. Enter your answers as a whole percent.)

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.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Economics Of Money Banking And Financial Markets

Authors: Frederic Mishkin

10th Global Edition

0273765736, 978-0273765738

More Books

Students also viewed these Finance questions