Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Chapter 17, Problem 6RQ
To determine
The difference between a dividend return and a
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Shows the derivative function of:
TC = 4Q² + 2Q + DC(Q) + FC,where TC = Total Cost, DC = Depreciation cost of capital for each Q production, and FC = Fixed Cost.
On the advice of your uncle, you purchased 10 shares of a well-established U.S.-based corporate stock for $21.5 per share. After 1 quarter, you received $0.25 per share dividends each quarter for 2 years. At that point, the stock price had gone down in a short-term recession, so you purchased 10 more shares at $15 per share. The stock continued to pay 25¢ a share on all 20 shares. After 3 years (12 quarters), you decided to sell the stock since it had increased in market value to $24.5 per share. Make the following assumptions: (a) no commissions for the purchase or sale of the stock, (b) no government taxes on the dividends, and (c) quarterly compounding of the rate of return. What is the effective interest rate per year? The effective interest rate per year is %.
Is it always possible for the cash borrowed (released) from a project tobe reinvested to yield a rate of return equal to that received from the project?
Chapter 17 Solutions
Macroeconomics (Fourth Edition)
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