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EXAMPLE 5.1 (Internal rate of return) Smith buys 1000 shares of stock at 5.00 per share and pays a commission of 2%. Six months later
EXAMPLE 5.1 (Internal rate of return) Smith buys 1000 shares of stock at 5.00 per share and pays a commission of 2%. Six months later Smith receives a cash dividend of 20 per share, which Smith immediately reinvests commission-free in shares at a price of 4.00 per share. Six months after that Smith buys another 500 shares at a price of 4.50 per share, and pays a commission of 2%. Six months after that Smith receives another cash dividend of 25 per share and sells all the existing shares at 5.00 per share, again paying a 2% commission. Find the IRR for Smith's transaction in the form i(2) 5.1.3 Repeat Example 5.1 removing all commission expenses on the purchase and sale of shares
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