Answered: You invested $12,396.22 in Hawkeye…

You invested $12,396.22 in Hawkeye Hats, Inc. four years ago. You sold the stock today for $9,842.33. What was your geometric average return or cumulative annual growth rate?

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

Gerard Consolidated’s last annual dividend was $1.40. The dividend is expected to grow by 20% this year, 16% next year, 12% the year after next, and 8% from the following year forward. If the required return on Gerard’s common stock is 13.50%, what is the intrinsic value of Gerard’s common stock?
The return paΣern on your favorite stock has been 5%, 8%, -12%, 15%, 21% over the last five years. What are your average return and total change in wealth per year over the period? explain this question in detail and give me the complete calculations to understand the sum
Suppose that you purchased a single stock five years ago for $1.22. The stock is now valued at $5.10 today. What has been the average annual percent growth in the price since you purchased it? Report your answer without the percentage symbol (for example, 75.2% would be 75.2)
Financial analysts forecast Safeco Corp.’s (SAF) growth rate for the future to be 8 percent. Safeco’s recent dividend was $1.25.What is the value of Safeco stock when the required return is 10 percent? (Round your answer to 2 decimal places.)
Slow 'n Steady, Inc., has a stock price of $28, will pay a dividend next year of $2.95, and has expected dividend growth of 1.7% per year. What is your estimate of Slow 'n Steady's cost of equity capital? The required return (cost of capital) of levered equity is%. (Round to one decimal place.)
A firm's stock is selling for $62. The next annual dividend is expected to be $3.00. The growth rate is 9%. The flotation cost is $5.00. What is the cost of retained earnings?
McCracken Roofing, Inc., common stock paid a dividend of $1.41 per share last year. The company expects earnings and dividends to grow at a rate of 5% per year for the foreseeable future. a. What required rate of return for this stock would result in a price per share of $26? b. If McCracken expects both earnings and dividends to grow at an annual rate of 11%,what required rate of return would result in a price per share of $26?
A firm is expected to pay an annual dividend of $2.40 per share next year. The market price of stock is $75.25 and the growth rate is 2.5%. What is the cost of equity?
Now or Later, Inc. recently paid $2.10 as an annual dividend. Future dividends are projected at $2.5, $3 and $4 over the next three years, respectively. At the end of the third year, you expect to sell the stock for $34. The stock of the company is selling for $34 today. How much added wealth is expected from your investment in the stock given that the expected return is 6%
A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per share and sells for $59. Required: a. What is the total rate of return on the stock? b. What are the dividend yield and percentage capital gain? c. Now suppose the year-end stock price after the dividend is paid is $44. What are the dividend yield and percentage capital gain in this case?
An investor purchased a stock one year ago for $43.00. It paid an annual cash dividend of $3.37 and is now worth $50.61. What total return did the investor earn? Would the investor have experienced a capital gain? The investor would experience a capital gain in the amount of $?. Round to nearest cent The total return earned by the investor is $?
By investing in a particular stock, a person can make a profit in one year of $3900 with probability 0.4 or take a loss of $800 with probability 0.6. What is this person's expected gain?

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