Calculate dollar return and rate of return

Reference no: EM1349357

Assume that $10,000 was invested in stock of General Medical Corporation with the intention of selling after one year. The stock pays no dividends, so the entire return will be based on the price of the stock when sold. The opportunity cost of capital on the stock is 10%.
a. To begin, assume that the stock sale nets $11,500. What is the dollar return on the stock investments? What is the rate of return?
b. assume that the stock price falls and the net is only $9.500 when the stock is sold. What is the dollar return and rate of return?
c. Assume that the stock is held for 2 years. What is the dollar return and rate of return?

Reference no: EM1349357

Questions Cloud

Determine the immediate dilution effect : The Hub corporation currently has four million shares of stocks outstanding and will report earnings of 6 million in the current year. The company is planning the issuance of one million additional shares that will net $30 per share to the corporatio..

Compute the following arguments and decide : Compute the following arguments and decide whether they are sound. Are the premises upon which these arguments based sound?

Steps to implementing organizational change : Responsibilities of managers to implement sudden, drastic organizational changes within their scope of responsibility with references APA format

Practice in forensic counseling specialty : Then, explain how this design might be used to inform practice in forensic counseling specialty.

Calculate dollar return and rate of return : Suppose that $10,000 was invested in stock of General Medical Company with the intention of selling after one year. The stock pays no dividends, so entire return will be based on price of the stock when sold.

Illustrate what is the value of the money multiplier : Illustrate what is the value of the money multiplier. What is the value of the nominal money supply. What are the nominal values of deposits, currency, and reserves.

How to identify the problem in detail : How to Identify the problem in detail and What are the major factors involved and Analyze the diagram and identify next steps

Counseling-related qualitative research article : Select a counseling-related qualitative research article that contains a description of data analysis procedures and clear recommendations for practice and give a brief summary of the article you selected and provide full APA citation.

Determine the financial impact of presentation : Explain a transaction or set of transactions affecting a firm you have worked for or that you are aware of that could arguably be presented in more than one way in financial statements.

User Account

All Pages