On January 1, you bought 100 shares of ABD stock for $19/share with funds that you borrowed atan annual rate of 8%. The stock paid dividends per share of $1.50 at the end of the first year, andof $2.20 at the end of year two. What rate of return did you earn if you sold the stock for $21/shareat the end of year two. Group of answer choices 14.52 % 12.52 9.99 13.33 15.12. Flag question:Question 22The NPV of the investment was, Group of answer choices $5.70 2.28 4.28 3.28 1.68.

volume_upRate of Return on InvestmentGiven:Purchase price per share: $19Number of shares:…

Answered: On January 1, you bought 100 shares of…

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter7: Stocks (equity) - Characterstics And Valuation

Section: Chapter Questions

Problem 1PROB

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On January 1, you bought 100 shares of ABD stock for $19/share with funds that you borrowed at an annual rate of 8%. The stock paid dividends per share of $1.50 at the end of the first year, and of $2.20 at the end of year two. What rate of return did you earn if you sold the stock for $21/share at the end of year two. Hint: Compute the IRR per share. 14.52% 12.52% 9.99% 13.33% 15.12%.
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