Suppose you buy 100 shares of Abolishing Dividend Corporation at the beginning of year 1 for $80. Abolishing Dividend Corporation pays no dividends. The stock price at the end of year 1 is $100, the price is $120 at the end of year 2, and the price is $150 at the end of year 3. The stock price declines to $80 at the end of year 4, and you sell your 100 shares. For the four years, your geometric average return is O 0.0% 5.7% 9.2% 34.5%

Suppose you buy 100 shares of Abolishing Dividend Corporation at the beginning of year 1 for $80. Abolishing Dividend Corporation pays no dividends. The stock price at the end of year 1 is $100, the price is $120 at the end of year 2, and the price is $150 at the end of year 3. The stock price declines to $80 at the end of year 4, and you sell your 100 shares. For the four years, your geometric average return is O 0.0% 5.7% 9.2% 34.5%

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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company X has 100 shares outstanding. It earns $2,000 per year perpetually and announces that it will use $1,000 to repurchase its shares in the open market instead of paying dividends. Calculate the number of shares outstanding at the end of year 1, after the first share repurchase, if the required rate of return is 10%. A. 110.0 B. 95.45 C. 100.0 D. 104.55 E. 90.91
You bought a share of Pacebook stock for $20 at the beginning of the year. Pacebook stock paid dividend of $1.50 total this year. Now, it is the end of the year, and you decided to sell the stock at the current price of $23. If you ignore any trading costs and taxes, what is your simple holding period return on the stock? answer is 22.5%
You own 2,200 shares of stock in Avondale Corporation. You will receive a dividend of $1.50 per share in one year. In two years, the company will pay a liquidating dividend of $45 per share. The required return on the company's stock is 20 percent. Suppose you want only $2,700 total in dividends the first year. What will your homemade dividend be in two years? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Answer is complete but not entirely correct. Homemade dividend S 69,343 X
6) You purchased 150 shares of A llen Pharmaceuticals stock at $34.00. A year later you bought an additional 300 shares at $38.75. You paid a commission of $29.95 on each transaction. A year later you sold the original 150 shares plus 100 shares from the second purchase of 300 shares at $46.71. You paid a sales commission of $40.00 when they sold the stock. What was the profit or loss from the sale of the 250 shares? Galaxy A32 5G
At the start of the year, you purchase 200 shares of Manor Corporation at $25 per share. During the year, you receive $2.25 in dividends. At the end of the year, the stock price has declined to $20 per share. Calculate your total dollar return for the year. Multiple Choice $550 ($550) $1,450 ($1,450) $8,550
Suppose you have $10,000 in cash to invest. You decide to sell short $5000 worth of Earlham stock and invest the proceeds from your short sale, plus your $10,000 into one-year U.S. Treasury bills earning 5%. At the end of the year, you decide to liquidate your portfolio. Earlham Industries was priced at $40 per share at the beginning of the year. At the end of the year, Earlham Industries paid a dividend of $1 per share and the share price was $50. The return on your portfolio is closest to: 12.25% -6.25% -2.5% 5%
2 years ago I purchased 100 shares of General Mills Corporation for $42 a share plus a commission of $29 to purchase. During the last 2 years I received the dividend amount 1.92 per share the first year and 1.96 per share the second year. At the end of 2 years I sold my stock for $49 a share minus a total commission of $34 to sell the stock. What is the dividend yield of my stock when I purchased it?? What is my dividend yield at the time I sold it? What is my total return when I sold the stock and the end of 2 years? What is the annualized holding period yield of my investment at the end of w years?
In you cash account, you buy 100 shares of XYZ Corporation at a price of $10 per share. Two months later, XYZ pays a dividend $0.21 per share. You sell all 100 shares of XYZ three months later at a price of $12 per share. What is your total return on this trade in dollar amount?
You own $107,000 worth of Smart Money stock. One year from now, you will receive a dividend of $2.95 per share. You will receive a dividend of $3.10 two years from now. You will sell the stock for $72 per share three years from now. Dividends are taxed at the rate of 38 percent. Assume there is no capital gains tax. The required aftertax rate of return is 16 percent. How many shares of stock do you own? Give typing answer with explanation and conclusion
You own 600 shares of stock in Avondale Corporation. The company plans to pay a dividend of $2.48 per share in one year and a final liquidating dividend of $20.10 per share two years from now. The required return on Avondale stock is 16.3 percent. What will your dividend income be this year if you use homemade dividends to create two equal annual dividend payments?
Two years ago, you purchased 100 shares of General Mills Corporation. Your purchase price was $61 a share, plus a total commission of $38 to purchase the stock. During the last two years, you have received total dividends of $2.48 per share. Also, assume that at the end of two years, you sold your General Mills stock for $66 a share minus a total commission of $36 to sell the stock. Calculate the total return for your investment and the annualized holding period yield. O Total return on the investment: $574. Annualized holding period yield: 4.70%. O Total return on the investment: $674. Annualized holding period yield: 5.52%. O Total return on the investment: $774. Annualized holding period yield: 6.34%. O Total return on the investment: $874. Annualized holding period yield: 7.16%.
What price would you be willing to pay to purchase 1 share of this stock? (Picture )

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