You purchase 100 shares of stock for $40 a share. The stock pays a $2 per share dividend at year-end.
What is the rate of return on your investment for the end-of-year stock prices listed below? What is your real (inflation-adjusted) rate of return?
Assume an inflation rate of 3%. (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign.
Do not round intermediate calculations. Round your "Real Rate of Return" answers to 2 decimal places.)
Rate of Return |
Real Rate of Return |
| a. $38 |
% |
% |
| b. $40 |
% |
% |
| c. $46 |
% |
% |