# 30An investor has examined Target stock and makesthe following predictions for the future:YEARDIVIDEND1$1.1223$1.25 $1.594Submit$1.88The investor believes the selling price in four yearswill be $85.41. The price of Target stock thismorning is $71.68. What return will the investor earnif he is correct about future dividends and sellingprice?Answer format: Percentage Round to: 2 decimalplaces (Example: 9.24%, % sign required. Willaccept decimal format rounded to 4 decimal places(ex: 0.0924))

Rate of return refers to the minimum return to be earned by the investors over the amount of…

Answered: An investor has examined Target stock…

An investor has examined Target stock and makes the following predictions for the future: YEAR DIVIDEND 1 $1.12 2 $1.25 3 $1.59 4 $1.88

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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Question

# 30
An investor has examined Target stock and makes
the following predictions for the future:
YEAR
DIVIDEND
1
$1.12
2
3
$1.25 $1.59
4
Submit
$1.88
The investor believes the selling price in four years
will be $85.41. The price of Target stock this
morning is $71.68. What return will the investor earn
if he is correct about future dividends and selling
price?
Answer format: Percentage Round to: 2 decimal
places (Example: 9.24%, % sign required. Will
accept decimal format rounded to 4 decimal places
(ex: 0.0924))

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