Question
You purchase 100 share of stock for $25 a share. The stock pays a $3 per share dividend at year-end. a. What is the rate
You purchase 100 share of stock for $25 a share. The stock pays a $3 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)$22, (ii)$25, (iii)$26?
Stock Price Rate of Return
22 %
25 %
26 %
b. What is your real (inflation-adjusted) rate of return if the inflation rate is 2%?
Stock Price Rate of Return
22 %
25 %
26 %
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
978-0324289114, 0324289111
