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Computing the expected rate of return on stock

You just purchased the common stock of Mary Flower Corporation for $25 per share. Suppose the stock has a 65% chance of being $35 and 35% chance of being $18 per share one year later.

What is the expected rate of return on the stock?

a. 16.2%
b. 11.5%
c. 9.8%
d. 20.94%

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Finance Basics: Computing the expected rate of return on stock

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Computing the expected rate of return on stock

Reference No:- TGS0670271

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Computing the expected rate of return on stock

Reference No:- TGS0670271

Recent Questions Asked Finance Basics

Q : What percentage of students who have done

Q : Computing the net working capital

Q : Determine the method for calculating profitability

Q : What should the total materials cost be at a production

Q : Computing the expected rate of return on stock

Q : Approximate real rate of interest

Q : What is indifference level of ebit

Q : Meaning of source of finance

Q : My biggest perspective change

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