What rate of return did your stocks cam for this accounting question? Suppose you invested $800 in stocks 10years ago. If your account is now worth$5,875, what rate of return did yourstocks cam?a. 15.02%b. 22.07%c. 13.05%d. 18.08%e. 11.03%

Given:Present value (PV) = $800Future value (FV) = $5,875Time in years (n) = 10Rate of return (r) =…

Answered: Suppose you invested $800 in stocks 10…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 11P

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Suppose Lilly V, Inc. has just paid a dividend. The next dividend, to be paid in a year, is forecasted to be $4. If the growth rate of dividends is 7% and the discount rate is 11%, at what price will the stock sell? a.Less than $100 b.More than $100 c.$100 d.$111
You observe a stock price of $17. You expect a dividend growth rate of 5% and the next year's dividend was $1.70. What is the required return?A. 14.5%B. 15%C. 15.5%
You presently own stock that you purchased one year ago. Your return on the stock for the past year was 20%. You calculate your real return on investment was 12.15%. The rate of inflation must have been Select one: О a.5% O b. 7% O c.3% O d.11% O e. 9%
What is the current price of a share of stock when last year’s dividend was P3.00, the growth rate is 6 percent, and the investor's required rate of return is 12 percent? A. P25.00 B. P26.50 C. P50.00 D. P53.00
Suppose that you have just purchased a share of stock for $32. The most recent dividend was $2.2 and dividends are expected to grow at a rate of 4% indefinitely. What must your required return be on the stock?
What comes closest to the value today of a stock that just paid a dividend of $1 and expects to grow that dividend by 10% per year in year 1 and year 2, and then grow each dividend beginning in year 3 by 2% forever if the required rate of return is 5%? A. $39.46 B. $38.25 C. $38.03 D. $37.66 E. $37.08
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A stock paying $5 in annual dividends sells now for $80 and has an expected return of 14%. What might investors expect to pay for the stock one year from now? O a. $91.20 O b. $82.20 O c. $86.20 O d. $87.20
2. Answer both questions: a. You purchase 100 shares of stock for $40 a share. The stock pays a $2 per share dividend at year-end. What is the rate of return on your investment if the year-end stock prices turn out to be $38, $40, and $42? What is your real (inflation-adjusted) rate of return in each case, assuming an inflation rate of 3%? b. Consider the following information on the returns on stock and bond investment. Scenario Profitability Stocks Bonds Recession .2 -5% +14% Normal Economy .6 +15% +8% Boom .2 +25% +4% i) Calculate the expected rate of return and standard deviation in each investment. ii) Do your results support or contradict the historical record on the relationship between risk and return in the financial market in both Canada and the United States? iii) Which investment would you prefer? Explain your answer.
What was your holding period return on these financial accounting question?

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Suppose you invested $800 in stocks 10 years ago. If your account is now worth $5,875, what rate of return did your stocks cam? a. 15.02% b. 22.07% c. 13.05% d. 18.08% e. 11.03%