EBK CFIN
6th Edition
ISBN: 9781337671743
Author: BESLEY
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 5, Problem 4PROB
Summary Introduction
The rate of
W sold each share for $156 which is purchased one year ago at $150 each.
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wilma just sold all the shares of international inns stock that she owned for $156 per share. she purchased the stock one year ago for $150 per share. ifwilma did not recieve any dividend payments during the year, what yeild did she earn on her investment?
Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $25,000 for 1,200 shares of Malti Company’s common stock. She received a $1,032 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $24,000. Kathy would like to earn a return of at least 13% on all of her investments. She is not sure whether the Malti Company stock provided a 13% return and would like some help with the necessary computations.
Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables.
Required:
1. Compute the net present value that Kathy earned on her investment in Malti Company stock.
2. Did the Malti Company stock provide a 13% return?
Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For
example, three years ago she paid $23,500 for 1,030 shares of Malti Company's common stock. She received a $917 cash dividend on
the stock at the end of each year for three years. At the end of three years, she sold the stock for $21,000. Kathy would like to earn a
return of at least 8% on all of her investments. She is not sure whether the Malti Company stock provided a 8% return and would like
some help with the necessary computations.
Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using tables.
Required:
1. Compute the net present value that Kathy earned on her investment in Malti Company stock.
2. Did the Malti Company stock provide a 8% return?
Complete this question by entering your answers in the tabs below.
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Required 2
Compute the net present value that Kathy earned on her investment in…
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