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You purchase 100 shares of stock for $54 a share. The stock pays a $4 per share dividend at year-end. What is the rate of
You purchase 100 shares of stock for $54 a share. The stock pays a $4 per share dividend at year-end. What is the rate of return on your investment for these end-of-year stock prices? What is your real (inflation-adjusted) rate of return? Assume an inflation rate of 5%. Calculate the Rate of return and real rate when End of year stock price is $49, $54 and $58.
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