You purchase 115 shares of stock for $53 a share. The stock pays a $7 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 slgn for negative numbers If It is necessary.) a. End-of-year stock price = $48 Rate of return Real rate b. End-of-year stock price = $53 Rate of return Real rate c. End-of-year stock price = $60 Rate of return Real rate

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
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You purchase 115 shares of stock for $53 a share. The stock pays a $7 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 = $48
Rate of return
Real rate
b. End-of-year stock price = $53
Rate of return
Real rate
c. End-of-year stock price = $60
Rate of return
Real rate
Transcribed Image Text:You purchase 115 shares of stock for $53 a share. The stock pays a $7 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 = $48 Rate of return Real rate b. End-of-year stock price = $53 Rate of return Real rate c. End-of-year stock price = $60 Rate of return Real rate
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