Effective interest rates from perspective of individual

Reference no: EM132002588

1. An issue of common stock that paid a dividend yesterday of $4.10, and is currently priced at $89 per share. Calculate this stock's capital gains yield if investors anticipate the company's dividends to grow for the foreseeable future at a rate of 6%. _____________

2. Describe the likely importance of the difference between nominal and effective interest rates from the perspective of an individual: 1) buying a new automobile using a 60-month installment loan, versus an individual 2) investing for their retirement in a 401k plan through their employer.

Reference no: EM132002588

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