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Struggling on calculating the NPV... Really appreciate the help! Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate
Struggling on calculating the NPV... Really appreciate the help!
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 $18,000 for 800 shares of Malti Company's common stock. She received a $560 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 $20,000. Kathy would like to earn a return of at least 10% on all of her investments. She is not sure whether the Malti Company stock provided a 10% return and would like some help with the necessary computations. (Ignore income taxes.) Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables. Required: Determine the net present value. (Round your answer to the nearest whole dollar.) Net present value _________________ Did Kathy Myers earn 10% return on her investment? Yes NoStep by Step Solution
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