An investor bought 100 shares of stock at a cost of $10 per share. He held thestock for 15 years and then sold it for a total of $4,000. For the first three years, he received no dividends. For each of the next seven years, he received total dividends of $50 per year. For the remaining period, he received total dividends of $100 per year. What rate of return did he make on the investment?
An investor bought 100 shares of stock at a cost of $10 per share. He held thestock for 15 years and then sold it for a total of $4,000. For the first three years, he received no dividends. For each of the next seven years, he received total dividends of $50 per year. For the remaining period, he received total dividends of $100 per year. What rate of return did he make on the investment?
Chapter5: The Cost Of Money (interest Rates)
Section: Chapter Questions
Problem 5PROB
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An investor bought 100 shares of stock at a cost of $10 per share. He held the
stock for 15 years and then sold it for a total of $4,000. For the first three years, he received no dividends. For each of the next seven years, he received total dividends of $50 per year. For the remaining period, he received total dividends of $100 per year. What
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