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What is the dollar return on the stock investment

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Reference no: EM133107644

Question 1 - Assume that $15,000 was invested in the stock of Hattiesburg Healthcare Service LLC 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 8 percent. To begin, assume that the stock sale nets $17,000. What is the dollar return on the stock investment?

Question 2 - Refer to question 1. Assume that the stock price falls and the net is only $13,000 when the stock is sold. What are the dollar return and the rate of return?

Question 3 - Refer to question 1. Assume that the sales price remains the same as $17,000, but the stock is held for two years. Now, what are the dollar return and the rate of return?

Reference no: EM133107644

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