An analyst predicted last year that the stock of Logistics, Inc., would offer a total return of at least 17% in the coming year. At the beginning of the year, the firm had a stock market value of $9 million. At the end of the year, it had a market value of $11 million even though it experienced a loss, or negative net income, of $0.5 million. Did the analyst's prediction prove correct? Explain using the values for total annual return.
- What is the total rate of return for the firm?
- Did the analysts prediction prove correct?