An investor bought 80 shares of stock at a cost of $7 per share. He held the stock for 14 years and then sold it for a total of $2,800. For the first two years, he received no dividends. For each of the next six years, he received total dividends of $70 per year. For the remaining period, he received total dividends of $140 per year. What rate of return did he make on the investment? The rate of return made on the investment is % (Round to two decimal places.)

An investor bought 80 shares of stock at a cost of $7 per share. He held the stock for 14 years and then sold it for a total of $2,800. For the first two years, he received no dividends. For each of the next six years, he received total dividends of $70 per year. For the remaining period, he received total dividends of $140 per year. What rate of return did he make on the investment? The rate of return made on the investment is % (Round to two decimal places.)

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

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On the advice of your uncle, you purchased 10 shares of a well-established U.S.-based corporate stock for $20.5 per share. After 1 quarter, you received $0.25 per share dividends each quarter for 2 years. At that point, the stock price had gone down in a short-term recession, so you purchased 10 more shares at $14 per share. The stock continued to pay 25¢ a share on all 20 shares. After 3 years (12 quarters), you decided to sell the stock since it had increased in market value to $22 per share. Make the following assumptions: (a) no commissions for the purchase or sale of the stock, (b) no government taxes on the dividends, and (c) quarterly compounding of the rate of return. What is the effective interest rate per year? The effective interest rate per year is wwwwwww
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Peter Gunderson bought 2,000 shares of stock in a transportation company at $45.10 per share. Ten months later he sold the stock at $78.22 per share. If he had to pay his broker a commission of $85, how much profit did Peter make on this investment? Round your answer to the nearest dollar.
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