Question
NEED HELP WITH PART B You purchase 100 shares of stock for $40 a share. The stock pays a $2 per share dividend at year-end.
NEED HELP WITH PART B
You purchase 100 shares of stock for $40 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) $38; (ii) $40; (iii) $46? (Leave no cells blank - be certain to enter "0" wherever required. Enter your answers as a whole percent.) Stock price Rate of return $38 0 % $40 5 % $46 20 % b. What is your real (inflation-adjusted) rate of return if the inflation rate is 3%? (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 $38 % $40 % $46 %
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