A stock costs $80 and pays a $4 dividend each year for three years.
a) If an investor buys the stock for $80 and expects to sell it for $100 after three years, what is the anticipated annual rate of return?
b) What would be the rate of return if the purchase price were $60?
c) What would be the rate of return if the dividend were $1 annually and the purchase price were $80 and the sale price were $100?