EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
expand_more
expand_more
format_list_bulleted
Question
Tammy Jackson purchased 141 shares of All-American Manufacturing Company stock at $40.50 a share. One year later, she sold the stock for $44 a share. She paid her broker a $36 commission when she purchased the stock and a $42 commission when she sold it. During the 12 months she owned the stock, she received $167 in dividends. Calculate Tammy’s total
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by stepSolved in 2 steps
Knowledge Booster
Similar questions
- One year ago, Regina purchased $1,050 worth of Elite Electrician’s common stock for $42 per share. During the year, Regina received two dividend payments, each equal to $0.05 per share. The current market value of the stock is $44 per share. What yield did Regina earn on her investment during the year?arrow_forwardKathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return she is earning. For example, three years ago she paid $19,000 for 930 shares of Malti Company's common stock. She received a cash dividend of $735 on the stock at the end of each year for three years. At the end of three years, she sold the stock for $22,000. Kathy would like to earn a return of at least 17% on all of her investments. She is not sure whether the Malti Company stock provides a 17% return and would like some help with the necessary computations. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value Kathy earned on her investment in Malti Company stock. 2. Did the Malti Company stock provide a 17% return? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the net present value Kathy earned on her investment in Malti…arrow_forwardKathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $24,000 for 980 shares of Malti Company’s common stock. She received a $823 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $22,000. Kathy would like to earn a return of at least 10% on all of her investments. She is not sure whether the Malti Company stock provide a 10% return and would like some help with the necessary computations. Required: 1. Compute the net present value that Kathy earned on her investment in Malti Company stock. 2. Did the Malti Company stock provide a 10% return?arrow_forward
- Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return she is earning. For example, three years ago she paid $17,000 for 910 shares of Malti Company's common stock. She received a cash dividend of $701 on the stock at the end of each year for three years. At the end of three years, she sold the stock for $16,000. Kathy would like to earn a return of at least 9% on all of her investments. She is not sure whether the Malti Company stock provides a 9% return and would like some help with the necessary computations. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value Kathy earned on her investment in Malti Company stock. 2. Did the Malti Company stock provide a 9% return? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the net present value Kathy earned on her investment in Malti…arrow_forwardKathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $23,500 for 1,030 shares of Malti Company's common stock. She received a $917 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $21,000. Kathy would like to earn a return of at least 8% on all of her investments. She is not sure whether the Malti Company stock provided a 8% return and would like some help with the necessary computations. Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value that Kathy earned on her investment in Malti Company stock. 2. Did the Malti Company stock provide a 8% return? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the net present value that Kathy earned on her investment in…arrow_forwardKathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $23,000 for 500 shares of Malti Company's common stock. She received a $460 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $30,000. Kathy would like to earn a return of at least 13% on all of her investments. She is not sure whether the Malti Company stock provide a 13% return and would like some help with the necessary computations. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value that Kathy earned on her investment in Malti Company stock. 2. Did the Malti Company stock provide a 13% return? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the net present value that Kathy earned on her investment…arrow_forward
- Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $25,000 for 1,200 shares of Malti Company’s common stock. She received a $1,032 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $24,000. Kathy would like to earn a return of at least 13% on all of her investments. She is not sure whether the Malti Company stock provided a 13% return and would like some help with the necessary computations. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value that Kathy earned on her investment in Malti Company stock. 2. Did the Malti Company stock provide a 13% return?arrow_forwardJan purchased 100 shares of Peach Computer stock for $18 per share, plus a $45 brokerage commission. Every 6 months she received a dividend from Peach of 50 cents per share. At the end of 2 years, just after receiving the fourth dividend, she sold the stock for $23 per share and paid a $58 brokerage commission from the proceeds.What annual rate of return did she receive on her investment? Solution: 1. NPW=PW of Benefits - PW of Costs=0 o Number of terms n= o PW of Benefits = (P/A,i*,n)+ (P/F,i*,n); O PW of Costs= 2. Find IRR through interpolation o Try i*=7%, NPW= o Try i*=8%, NPW= o Through interpolation, ROR= % 3. Other Calculations: o Nominal rate r= %; o Effective rate iz= %.arrow_forwardKathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate ofreturn that she is earning. For example, three years ago she paid $13,000 for 200 shares of Malti Company’s common stock. She received a $420 cash dividend on the stock at the end of each year for three years.At the end of three years, she sold the stock for $16,000. Kathy would like to earn a return of at least 14%on all of her investments. She is not sure whether the Malti Company stock provided a 14% return andwould like some help with the necessary computations.Required:(Ignore income taxes.) Using the net present value method, determine whether or not the Malti Companystock provided a 14% return. Use the general format illustrated in Exhibit 12–2 and round all computationsto the nearest whole dollar.arrow_forward
- Last year Vivienne bought 100 shares of Holding Corporation common stock for $43 per share. During the year he received dividends of $1.30 per share. The stock is currently selling for $50 per share. What rate of return did Vivienne earn over the year?arrow_forwardAshley purchased a common stock worth $5,000 in year 1 and another worth $10,000 in year 5. Five years after her last investment, she sold all her stocks to a buyer for $80,000. Find the rate of return received on the investment.arrow_forwardAmy purchased a stock at $54 per share. She received quarterly dividends of $0.80 per share. After one year, Amy sold the stock at a price of $54.25 a share. What is her percentage holding period return on this investment?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT