2) You bought 1500 shares of Microsoft one year ago for $120 per share. Microsoft paid a $2 (per-share) dividend last year. The current stock price is $105. a. What rate of return did you earn from your Microsoft investment? b. If inflation rate over the last year was 4%, what is your real rate of return? c. Rather than buying 1500 Microsoft shares a year ago, you instead sold them short. What is the rate of return from your Microsoft trade now?

2) You bought 1500 shares of Microsoft one year ago for $120 per share. Microsoft paid a $2 (per-share) dividend last year. The current stock price is $105. a. What rate of return did you earn from your Microsoft investment? b. If inflation rate over the last year was 4%, what is your real rate of return? c. Rather than buying 1500 Microsoft shares a year ago, you instead sold them short. What is the rate of return from your Microsoft trade now?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

2.) One year ago you bought the common stock of Taiho at ¥2000 in Tokyo Stock Exchange. The price increased up ¥2100 today. You received a dividend of ¥120 per share during the period. The exchange rate was ¥100 = $1 when you bought the stock and it changed to ¥80 = $1 today. Calculate the realized dollar rate of return on the stock for the year. A.) 34.87%B.) -36.32% C.) -24.65%D .) 38.75% E.) 42.65%
Suppose that you sell short 500 shares of Intel, currently selling for $40 per share. Your initial percentage margin is 60%. Assume you earn no interest on the funds in your margin account and Intel has paid no dividends. a. What will be your rate of return after one year if Intel stock is selling at $40? b. If the maintenance margin is 30%, how high can Intel's price rise before you get a margin call?
(Calculating rates of return) The common stock of Placo Enterprises had a market price of $10.38 on the day you purchased it just one year ago. During the past year the stock had paid a dividend of $0.74 and closed at a price of $11.57. What rate of return did you earn on your investment in Placo's stock? The rate of return you earned on your investment in Placo's stock is%. (Round to two decimal places.)
I am having trouble solving this problem. Can you please provide me with some help? Thank you. I appreciate it. What is the value of a firm's stock that just paid $10 dividend this year, growing by 3% forever, if the interest rate is 6% per year?
1. You just sold a stock for $85. If the stock appreciated at 6% annually, and you owned it for eight years, what was the original price that you paid for the stock? 2. You are considering buying some order fulfillment software that is projected to save your company $27,500 per year for 3 years. If the current rate your company uses to evaluate its investments is 9%, what are you willing to pay for this investment?
Fix it Yourself just paid $5 dividends. The company is growing very fast; therefore, they are expecting to increase their dividend payments by 20% over the next 5 years and then they will pay a fixed amount of payment for the unforeseen future. What would be the appropriate stock price if the discount rate is 5%? $200.34. $100.00. $82.94. $232.95. $248.83. $223.20.
(Calculating rates of return) Blaxo Balloons manufactures and distributes birthday balloons. At the beginning of the year Blaxo's common stock was selling for $17.95 but by year end it was only $16.91. If the firm paid a total cash dividend of $1.76 during the year, what rate of return would you have earned if you had purchased the stock exactly one year ago? What would your rate of return have been if the firm had paid no cash dividend? The rate of return you would have earned is %. (Round to two decimal places.)
(Calculating rates of return) On December 10, 2007, the common stock of Google Inc. (GOOG) was trading for $ 718.42. One year later the shares sold for only $ 308.82. Google has never paid a common stock dividend. What rate of return would you have earned on your investment had you purchased the shares on December 10, 2007? Question content area bottom Part 1 The rate of return you would have earned is enter your response here %. (Round to two decimal places.)
One year ago you bought the common stock of Mizuho at ¥1050 in Tokyo Stock Exchange. The price is ¥1000 today. You received a dividend of ¥120 per share during the period. The exchange rate was ¥100 = $1 when you bought the stock and it is ¥80 = $1 today. Calculate the realized dollar rate of return on the stock if you sell the stock today. Select one: -6.89% O b. 28.11% O C. 33.33% O d. 23.13% a.

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS