***1. Ch12 Financial Planning Exercise 1eBookChapter 12Financial Planning Exercise 1Ranking investments by expected returnsWhat makes for a good investment? Use the approximate yield formula or a financial calculator to rank the following investments according to theirexpected returns. Round the answers to two decimal places. Do not round intermediate calculations.a. Buy a stock for $45 a share, hold it for 3 years, then sell it for $80 a share (the stock pays annual dividends of $3 a share).db. Buy a security for $20, hold it for 3 years, then sell it for $60 (current income on this security is zero). Do not round intermediatecalculations.%c. Buy a 1-year, 12 percent note for $940 (assume that the note has a $1,000 par value and that it will be held to maturity). Do not roundintermediate calculations.Grade it NowSave & ContinueContinue without savingNOV14O Ctv A WMacBook Air

Given information : Security A) Price of stock = $45 Time = 3 years Selling price = $80 Dividends =…

Answered: ula or a financial calculator to ra •…

ula or a financial calculator to ra • not round intermediate cale for $80 a share (the stock pays 50 (current income on this secu ote has a $1,000 par value and

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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Concept explainers

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.

Question

***
1. Ch12 Financial Planning Exercise 1
eBook
Chapter 12
Financial Planning Exercise 1
Ranking investments by expected returns
What makes for a good investment? Use the approximate yield formula or a financial calculator to rank the following investments according to their
expected returns. Round the answers to two decimal places. Do not round intermediate calculations.
a. Buy a stock for $45 a share, hold it for 3 years, then sell it for $80 a share (the stock pays annual dividends of $3 a share).
d
b. Buy a security for $20, hold it for 3 years, then sell it for $60 (current income on this security is zero). Do not round intermediate
calculations.
%
c. Buy a 1-year, 12 percent note for $940 (assume that the note has a $1,000 par value and that it will be held to maturity). Do not round
intermediate calculations.
Grade it Now
Save & Continue
Continue without saving
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14
O Ctv A W
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