Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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You can purchase stock from XYZ Corp at a price of $50/share. You purchase 100 shares today, and then invest $500/month each month thereafter purchasing new shares. You expect that the price of the stock will increase 5% annually (compounded monthly). If this happens, what will the value of your XYZ stock be in five years?
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$176,432
$27,586
$40,420
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- Compute the total and annual returns on the described investment. Five years after buying 200 shares of XYZ stock for $40 per share, you sell the stock for $11,500. The total return is %. (Do not round until the final answer. Then round to one decimal place as needed.)arrow_forwardYou would like to know how much you need to save and invest monthly to have a $1 million in your investment account in 40 years. The current balance in the investment account is $10,000. You expect to generate an annual rate of return of 6% in a stock portfolio. $115 $447 $340 $105arrow_forwardCompute the total and annual returns on the described investment. Four years after buying 50 shares of XYZ stock for $80 per share, you sell the stock for $6000.arrow_forward
- C.You register a saving plan offering $200,000 at the end of 20 years. The saving plan promises 6% APR (per year). How much do you need to deposit per year in the saving plan? D. You have a preferred stock paying $3 dividend. Its required rate of return is 10%. How much is the preferred stock? (Hint: the value of preferred stock is estimated with PV of perpetuity).arrow_forwardCompute the total and annual returns on the described investment. Four years after buying 50 shares of XYZ stock for $60 per share, you sell the stock for $ 4300.arrow_forwardYou are planning to save enough to retire in 40 years. To do this, you will invest $1,000 at the end of each month in a stock account and $500 at the end of each month in a bond account. The stock account is expected to give 8% APR, compounded monthly. The bond account is expected to give 4% APR, also compounded monthly. When you retire, you will combine the two accounts and invest in an account that will earn 6% APR. How much will you withdraw from your post-retirement account every month if your withdrawal period is 25 years?arrow_forward
- You invest $900 in stock A and $900 in stock B. If you earn 10 percent on stock A and 5 percent on stock B and hold each security for 14 years, what are the terminal values for each investment? Round your answers to the nearest cent. Stock A: $ Stock B: $ If you continue to hold each security and earn the same returns for 24 years, how much more will stock A generate than stock B over the entire time period? (When you invest for retirement, you should think about the impact of returns over time.) Round your answer to the nearest cent. $arrow_forwardSinging Fish Fine Foods has a current annual cash dividend policy of $3.50. The price of the stock is set to yield a return of 10%. What is the price of this stock if the dividend will be paid a. for 11 years? b. for 15 years? c. for 41 years? d. for 60 years? e. for 100 years? f. forever? a. What is the price of this stock if the dividend will be paid for 11 years? (Round to the nearest cent.)arrow_forwardIslander Corporation's common stock will pay a dividend of $3.50 one year from now. The annual dividend growth rate is 6% over two years after that. You plan to buy the stock now and sell at the end of third year for $80. At what price must you buy in order to receive your required return of 18%? O $29.17 $62.29 $74.86 O $72.36 $56.71arrow_forward
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