Please help with the following problem. Provide the solutions in an Excel spreadsheet.
GRP Corporation has $500,000 in a bank account paying 0.35% annual interest. As an alternative to leaving the money in the account, the company is considering investing the entire amount for five years. possible investments have been identified as shown below.
Investment D is ten thousand shares of common stock which cost $50 per share and recently paid an annual dividend of $4.25 per share. The company has been increasing earnings and dividends at an average annual rate of 4%. The current market rate of return on a similar common stock is 12%.
Assuming that you will invest in only one of these (if any), which would you choose and why?