Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

We are given the information that Microthins stock price was $21 in December 2012, $29 in December 2013, $27 in December 2014, $20 in December

We are given the information that Microthins stock price was $21 in December 2012, $29 in December 2013, $27 in December 2014, $20 in December 2015, and $26 in December 2016. It also pays annual dividends varying from 2012 through 2016.

Let's assume you do the following transactions:

a) In December 2012: buy 30,000 Microthin shares;

b) In December 2013: collect the dividends ($0.39 per share) on your shares, and then sell 10,000 shares;

c) In December 2014: collect the dividends ($0.43 per share) on your remaining shares, and then buy another 15,000 shares;

d) In December 2015: collect the dividends ($0.50 per share) on your remaining shares, and then sell another 10,000 shares.

e) In December 2016: collect the dividends ($0.52 per share) on your remaining shares, and then sell all your remaining shares.

Q1: What should be the IRR during your "December 2012 December 2016" period for your Microthin stock investment?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Economics And Finance Of Professional Team Sports

Authors: Daniel Plumley, Rob Wilson

1st Edition

0367655667, 978-0367655662

More Books

Students also viewed these Finance questions

Question

At what value does a partnership record partners' contributions?

Answered: 1 week ago

Question

=+c) What might you do instead?

Answered: 1 week ago

Question

What is one of the skills required for independent learning?Explain

Answered: 1 week ago

Question

What factors affect occupational accidents?

Answered: 1 week ago