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FinCorp Inc. purchased a stock for $50. It expects to hold the stock for two years, receive a dividend of $1.50 at the end of
FinCorp Inc. purchased a stock for $50. It expects to hold the stock for two years, receive a dividend of $1.50 at the end of each year, and sell the stock immediately after receiving the second dividend. Assume dividends are held in a zero-interest savings account. If the sale price is $75, what is the expected annual return? If the sale price is $35, what is the expected annual return? If the actual return was 4 percent, what was the sale price? If the actual return was 15 percent, what was the sale price?
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