Question
Flag You purchase 100 shares of stock for $25 a share. The stock pays a $2 per share dividend at year-end. a. What is the
Flag You purchase 100 shares of stock for $25 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) $23; (ii) $25; (iii) $28? (Leave no cells blank - be certain to enter "0" wherever required. Enter your answers as a whole percent.) Stock price Rate of return $23 % $25 % $28 % b. What is your real (inflation-adjusted) rate of return if the inflation rate is 5%? (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 price Real rate of return $23 % $25 % $28 %
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