VinubhaiDon't upload image please Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. Forexample, three years ago she paid $20,000 for 940 shares of Malti Company's common stock. She received a $752 cash dividend onthe stock at the end of each year for three years. At the end of three years, she sold the stock for $23,000. Kathy would like to earn areturn of at least 13% on all of her investments. She is not sure whether the Malti Company stock provide a 13% return and would likesome help with the necessary computations.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?Complete this question by entering your answers in the tabs below.Required 1 Required 2Compute the net present value that Kathy earned on her investment in Malti Company stock.Note: Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whole dollar amountNet present value< Required 1Required 2 >

Initial investment = -$20,000Dividend received for three years = $752Stock selling price at the end…

Answered: Kathy Myers frequently purchases stocks…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter11: Property Dispositions

Section: Chapter Questions

Problem 52P

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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. Required 1 Required 2 Compute the net present value that Kathy earned on her investment in…
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 $27,000 for 1,010 shares of Malti Company's common stock. She received a $879 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 $25,000. Kathy would like to earn a return of at least 7% on all of her investments. She is not sure whether the Malti Company stock provide a 7% return and would like some help with the necessary computations. Required: Compute the net present value that Kathy earned on her investment in Malti Company stock. Did the Malti Company stock provide a 7% return?
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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?
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