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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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.
Required 1
Required 2
Compute the net present value that Kathy earned on her investment in…
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?
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