Question
You purchase 100 shares of stock for $50 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 $50 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 (i) $48; (ii) $50; (iii) $54?(Leave no cells blank - be certain to enter "0" wherever required. Enter your answers as a whole percent.) |
Stock price | Rate of return |
$48 | % |
$50 | % |
$54 | % |
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.) |
Stock price | Real rate of return |
$48 | % |
$50 | % |
$54 | % |
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