What is the rate of return of the stock investment and is


An individual has $50,000 to invest. The government treasury bills (T-bills) pay 3.5% interest per year.   She considers investing in the stock parket instead, by buying a stock that now sells for $135 each and pays an anuual dividend of $12/per stock (Dividend=amount of profits that the company that sells the stock pays to the stockholders every year). She thinks that after 5 years the stock will be selling for $155 each. What is the rate of return of the stock investment and is it a better deal than the T-bills?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: What is the rate of return of the stock investment and is
Reference No:- TGS02785621

Expected delivery within 24 Hours