Today the institutional investor JAXA, which manages one of the most important pension funds in the manufacturing sector, will invest in an investment portfolio made up of 50,000 shares of a consumer goods company. The characteristics of these actions are described below.

The profit retention rate is 30%. This will remain until the end of the eighth year. Subsequently, the retention policy that will apply from the end of the ninth year will change to 20%.

It is expected that for every peso invested, the company will generate 15% (ROE). This return is expected to continue in perpetuity.

The market capitalization rate has been estimated to remain at 10% annual effective rate.

Similarly, fundamental analysts have estimated the price per share at the end of the ninth year to be equal to $64

Assume that the institutional investor sells the portfolio at the end of the eighth year. The market capitalization rate is expected to remain constant.

On the other hand, the investor will invest the dividends paid by the shares in an investment fund that guarantees an effective annual return of 11% for the next eight years.

a)Calculate the total amount invested in stocks today.

b) Calculate the effective annual return that the institutional investor will earn by holding the portfolio for 8 years.

O O 9.654% 9.832% 9.916% 10.086% 10.172% O O 9.654% 9.832% 9.916% 10.086% 10.172% O O 9.654% 9.832% 9.916% 10.086% 10.172% O O 9.654% 9.832% 9.916% 10.086% 10.172%