Kathy myers frequently purchases stocks and bonds but she

Reference no: EM13608969

Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, six years ago she paid $22,000 for 930 shares of Malti Company's common stock. She received a $651 cash dividend on the stock at the end of each year for six years. At the end of six years, she sold the stock for $22,800. 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.

The purchase of the stock is considered paid NOW so the factor is 1.0
The dividend is received over 6 years so the factor is from the PV of an Annuity table.
The sale of the stock is at the end of the sixth year so the factor is from the PV of $1.00 table.

Reference no: EM13608969

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