Foundations Of Financial Management
Foundations Of Financial Management
17th Edition
ISBN: 9781260013917
Author: BLOCK, Stanley B., HIRT, Geoffrey A., Danielsen, Bartley R.
Publisher: Mcgraw-hill Education,
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Chapter 9, Problem 33P
Summary Introduction

To calculate: The annual rate of return for Mr. Dow.

Introduction:

Rate of return:

A rate that shows the net profit or loss of an investor on their investment over a particular time period is termed as the rate of return.

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One year ago, Richard purchased 40 shares of common stock for $10 per share. During the year, he received one dividend payment in the amount of $0.50 per share. If the stock currently is worth $9 per share, what yield did Richard earn on his investment for the year?
Jonathan purchased some corporate stock 8 years ago for $12,000. He received quarterly dividends of $225 at the end of each quarter for the first 5 years, nothing for the sixth year, and $250 at the end of each quarter for the last 2 years. Immediately after receiving the last quarterly dividend, Jonathan sold the stock for $15,385. What was his annual rate of return? (IRR) Round your rate to the nearest tenth of a percent.
Evelyn pays $5,000 for shares in a new company. She sells the shares 10 years later for $19,500. What was her total return on this investment? Round your answer to the nearest tenth of a percent.

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Foundations Of Financial Management

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