Kevin owns 1 share of Acme, Inc. stock. He purchased the stock three years ago for $27. The stock is currently trading for $29.50 per share. The stock has paid the following dividends over the past three years. Year 1) S 1.50 Year 2) $2.00 Year 3) $2.50 What is the compounded rate of return (IRR) that Kevin has earned on this investment?

Kevin owns 1 share of Acme, Inc. stock. He purchased the stock three years ago for $27. The stock is currently trading for $29.50 per share. The stock has paid the following dividends over the past three years. Year 1) S 1.50 Year 2) $2.00 Year 3) $2.50 What is the compounded rate of return (IRR) that Kevin has earned on this investment?

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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Similar questions

Antonia invests $2,000 in the stock market, and the value of her stock grows at an 8% rate for the next three years. What is the value of her investment after three years? $2,080 $2,480 $2,519 $2,640 $2,780
Stan and Alicia can invest $40000 in preffered stock A which pay a dividend of $2000 a year, payable quarterly. They will re - invest the dividends in a savings account which presently earnes 3% compounded yearly. They expect the stock will reach a selling price of $44000 in 4 years. Assume a regular income marginal tax rate of 43%, and a dividend marginal tax rate of 17.45%, and a capital gains marginal tax rate of 21.5%. What is the after - tax EAR of this tock? Assume taxation is paid annually for the interests and dividends. (Calculate using HPR before and after tax) Ans: 5.72% ( Step by Step solution)
Darwin has a capital of $ 7100.00 which he invests for 3 years at 7.6 % p. a. a)How much will he receive come maturity time if the interest is compounded annually? Round to nearest 100th. b)How much will he received come maturity time if the interest is compounded semi-annually? Round to nearest 100th . c)How much will he receive come maturity time if the interest is compounded quarterly? Round to nearest 100th .
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On January 1, 2016. Charley Dow bought 1,000 shares of stock at $28 per share. On December 31, 2018, he sold the stock for $34 per share. What was his annual rate of return? (Use a Financial calculator to arrive at the answer. Round the final answer to 2 decimal places.) Annual rate of return d 15.33 %
Kevin invests $5000 at an APR of 5.6% compounded monthly. Carl invests $4800 at an APR of 6.2% compounded quarterly. Who has higher accumulated value after 2 years? Kevin: $5591 Carl: $6531 Kevin: $6531 Carl:$5429
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You originally purchased a stock for $54 and now its worth $66. What annual rate of interest did you earn if you purchased the stock 8 years ago? 6.37
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