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What is the cost-what is the income

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A friend of yours has contacted you and encourages you on starting a partnership together. You would be acting as the investor and would own 50% of the company. He asks for 5.000€ to start the business and he would issue 10 shares, constituting the company. After one years of working, the company pays the first dividend of 10€ a share. The second year it pays 15€ a share. The third you develop a new technique/improvement on your product and the dividend of that year is 35.000€ a share. The fourth and fifth years you get paid a dividend of 150.000€ per share. The fifth year on top of the dividend you sell two of your shares to a financial institution for the value of 500.000€.

Calculate the following:

  • What is the cost?
  • What is the income?
  • What is the profit on your investment?
  • What is your Holding period return?

Reference no: EM132500939

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