Reference no: EM13215370

The Duncan Company's stock is currently selling for $15. People generally expect its price to rise to $18 by the end of next year. They also expect that it will pay a dividend of $0.50 per share during the year.

a. What is the expected return on an investment in Duncan's stock?

b. Recalculate expected return if next year's price is forecast to be $17 & the dividend $0.25.

c. Calculate the actual return on Duncan if at the end of the year the price turns out to be $13 and the dividend actually paid was just $0.10.