Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You purchase 130 shares of stock for $50 share. The stock pays a $4 per share dividend at year-end. What is the rate of return

image text in transcribed
You purchase 130 shares of stock for $50 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% (Round your answers to 2 decimal places. Use the minus sign for negative numbers if it is necessary.) a. End-of-year stock price = $45 Rate of return Real rate b. End-of-year stock price = $50 Rate of return Real rate c. End-of-year stock price $54 Rate of return Real rate

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

Step: 3

blur-text-image

Ace Your Homework with AI

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

Get Started

Students also viewed these Finance questions