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Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three
Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $19,500 for 990 shares of Malti Company's common stock. She received a $842 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $23,000. Kathy would like to eam a eturn of at least 17 % nal of her vestment she snot s whe er he a Companys provided return and would like some help with the necessary computations. (Ignore income taxes.) Click here to view Exhibit 8B-1 and Exhibit 8B-2, to determine the appropriate discount factor(s) using tables Required a. Determine the net present value. (Round your answer to the nearest whole dollar.) Net present value b. Did Kathy Myers earn 17% return on her investment? Yes No
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