What is your real rate of return if the inflation rate

Assignment Help Financial Management

Reference no: EM131336436

You purchase 100 shares of stock for $50 a share. The stock pays a $4 per share dividend at year-end.

a. What is the rate of return on your investment if the end-of-year stock price is (i) $46; (ii) $50; (iii) $55? (Leave no cells blank - be certain to enter "0" wherever required. Enter your answers as a whole percent.)

Stock price Rate of return

$46 ________%

$50 ________ %

$55 _________%

b. What is your real (inflation-adjusted) rate of return if the inflation rate is 6%? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.)

Stock price Real rate of return

$46 ______ %

$50 _______%

$55 _______%

Reference no: EM131336436

Questions Cloud

Executive summary of a recent article on lean manufacturing : Please write 600 Word Executive Summary of a recent article on Lean Manufacturing or Six Sigma that demonstrates respect for people or its relative to it.

Strategic partnership with microsoft : In 2011, Nokia announced a strategic partnership with Microsoft, a new strategy and a new internal organization. Microsoft (2011) reported on the changes:

Calculate the current price-current yield to maturity : Calculate the current price of a $1, 000 par value bond that has a coupon rate of 9 percent, pays coupon interest annually, has 13 years remaining to maturity, and has a current yield to maturity (discount rate) of 12 percent.

Discuss the difference between power and authority : Legitimate power belongs to someone who occupies a particular job, office, or position in an organizational hierarchy. Discuss the difference between power and authority;

What is your real rate of return if the inflation rate : You purchase 100 shares of stock for $50 a share. The stock pays a $4 per share dividend at year-end. What is the rate of return on your investment if the end-of-year stock price is (i) $46; (ii) $50; (iii) $55? What is your real (inflation-adjusted)..

Understanding of psychological and sociological constructs : Why is it important that probation and parole officers have the knowledge and understanding of psychological and sociological constructs and theories

Personal biases and pitfalls : Even the most intelligent manager is prone to personal biases and pitfalls that can lead to bad decisions. We all carry biases based on our personal experiences. And we can all fall into various traps that lead to decisions that seem perfectly log..

Usually expect short-term interest rates to do in the future : If a yield curve slopes upward, then what term (maturity length) of bond pays the highest interest rate? Yield curves are usually upward sloping. According to the expectations theory of the term structure of interest rates, what does that suggest peo..

Incorporate an raci matrix : Discuss the appropriate uses of an RACI Matrix and describe a situation at your work where you might incorporate an RACI Matrix.

User Account

All Pages