User Account

All Pages

Opportunity cost of capital on the stock

Assignment Help Finance Basics
Reference no: EM132234952

Assume that $10,000 was invested in the stock of General Medical Corporation with the intention of selling after one year. The stock pays no dividends, so the entire return will be based on the price of the stock when sold. The opportunity cost of capital on the stock is 10 percent.

a. To begin, assume that the stock sale nets $11,500. I need the dollar return on the stock investment? I need the rate of return?

b. Assume that the stock price falls and the net is only $9,500 when the stock is sold. I need the dollar return and rate of return?

c. Assume that the stock is held for two years. Now, I need the dollar return and rate of return?

Reference no: EM132234952

Questions Cloud

Extend credit to a group of new customers : Firm Z is evaluating a proposal to extend credit to a group of new customers. The new customers will generate an average of $90,000 per day in new sales.
Develop research skills using the codification : Throughout the semester, you will research accounting topics (GAAP) using the Codification. This week you are tasked to review the Codification.
Cost of capital for the project : If the cost of capital for the project is 11 percent, I need the project's NPV and IRR. Please show work.
Distinguish the types of technology used in long-term care : Distinguish the types of technology used in long-term care—information systems, telehealth/telemedicine, and assistive technology ?
Opportunity cost of capital on the stock : The stock pays no dividends, so the entire return will be based on the price of the stock when sold. The opportunity cost of capital on the stock is 10 percent.
What will be the total annual cost of inventory : Holding costs are estimated at $1.25 per ton of bauxite. If Torque uses an inventory quantity of 3000 tons, what will be the total annual cost of inventory?
Describe the multidisciplinary roots : Describe the multidisciplinary roots of KM. Why do you feel each one contributes to the profession?
The total annual inventory carrying cost : Determine the annual inventory carrying cost for each item, and the total annual inventory carrying cost.
Explain the role of rd within a corporation : Please briefly explain the role of R&D within a corporation. Does more research and development automatically create shareholder value?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd