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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
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 (l) $38, (ii) $40: (iii) $46? (Leave no cells blank - be certain to enter "O" wherever required. Enter your answers as a whole percent.) Stock Price Rate of Return % 38 40 % 46 % 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.) Real Rate of Return Stock Price 38 40 % 46
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