What rate of return has sue earned on her investment

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Reference no: EM132048748

1. ABC, Inc. is expected to pay a dividend of $3.15 per share next year, and this dividend is expected to grow at a 5% rate annually forever thereafter. Given the risk level of the stock, investors require a 12% return. What should be the market price of ABC Inc.’s common stock?

$25.00

$26.25

$42.86

$45.00

None of the answers are correct.

2. Sue invested $1,000 eight years ago. If the investment is now worth $2,476, what rate of return has Sue earned on her investment?

12.0% 18.5% 11.4% -10.7% None of the answers is correct.

Reference no: EM132048748

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