Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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If you originally bought a share of stock for $27, and in one year it paid a dividend of $4 and now costs $33. You sell the stock today for $33, what is your percentage return? (answer in percent, but without the percent sign, e.g. "8.25" is 8.25%)
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- Suppose you bought a stock for $18.6 per share and you sold it for $41.9 after 2 years. The stock did not pay any dividends. What was your compound average monthly return from this investment? Answer in percent, rounded to two decimal places. Type your numeric answer and submitarrow_forwardYou 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%arrow_forwardYou are considering purchasing stock in Canyon Echo. You feel the company will increase its dividend at 4.2 percent indefinitely. The company just paid a dividend of $3.53 and you feel that the required return on the stock is 11.4 percent. What is the price per share of the company's stock?arrow_forward
- Your friend told you about a stock that they think will sell for $154 in one year. They do not pay a dividend yet and it selling for $198.3 today. What is the expected return. Convert to a percent then round to 2 decimal places. Answer:arrow_forwardSuppose the call money rate is 4.5 percent, and you pay a spread of 2.5 percent over that. You buy 800 shares of stock at $36 per share. You put up $14, 400. One year later, the stock is selling for $48 per share and you close out your position. What is your return assuming a dividend of $0.65 per share is paid?arrow_forwardA 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?arrow_forward
- You originally purchased Hershey stock at $161. It paid a dividend of $3.00 in the last year. Currently, the stock is selling for $156 per share. What is your total return if you sell the stock today?arrow_forwardYou purchased a stock for $53.4 a share and resold it one year later. Your total return for the year was 10.62 percent and the dividend yield was 6.18 percent. At what price (in $) did you resell the stock? Answer to two decimals.arrow_forwardYou are trying to decide whether to invest in a "value" stock (Hawaii Utility Co.) or a "growth" stock (HI Tech Co.). Hawaii Utility Co. currently pays a dividend of $5 per share per year, and you expect that dividend to grow by 1% per year forever (e.g., $5.05 next year). Its price is $125. HI Tech Co. currently pays a dividend of just $1 per share per year, but you expect its dividend to grow 4%6 per year forever. The price of HI Tech Co is also $125. Given your expectations, is one company a better deal than the other? Explain why or why not? (Hint; figure out the discount rate you would need to rationalize each price using the present value rules that we went over in class).arrow_forward
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