Question
An analyst predicted last year that the stock of logistics, Inc would offer a total return of at least 24% in the coming year. At
An analyst predicted last year that the stock of logistics, Inc would offer a total return of at least 24% in the coming year. At the beginning of the year, the firm had a stock market value of $7 million. At the end of the year it had a market value of 9 million even though it experienced a loss, or negative net income, of 1 million. Did the analysts prediction prove correct? Explain using the value for total annual return?
A. The total rate of return for the firm is ____
B. Did the analysts prediction prove correct?
A. No, the analysts prediction is incorrect because the firm had a lower total rate of return that the one the analysts predicted
B. No, the analysts prediction is incorrect because the firm had a netgative net income
C. yes, the analyst is correct because the firms total rate of return is even higher than the predicted one regardless of the negative net income.
D. yes, the analysts in correct because the firms negative net income was fully recovered by the positive annual rate of return.
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