What was your effective annual return on the stock

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Reference no: EM131998562

1. Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 3.9% rate of inflation in the future. The real risk-free rate is 1%, and the market risk premium is 5%. Mudd has a beta of 2.6, and its realized rate of return has averaged 8.5% over the past 5 years. Round your answer to two decimal places.

2. You bought some stock on January 1 for $50 per share and sold in the same year on September 30 for $55 per share. In the meantime, you received cash dividends on $1 on March 31 and June 30. What was your effective annual return on the stock?

Reference no: EM131998562

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