A stock costs $80 and pays a $4 dividend each year for three years. a) If...

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?

Please show how to solve within excel and provide formulas. Thank you.

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

jeff jeffy answered 3 weeks ago

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