Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. kathy myers frequently purchases stocks and bonds,

Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the...

80.2K

Verified Solution

Question

Accounting

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 $24,000 for 980 shares of Malti Companys 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 provided a 10% 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.

Compute the net present value that Kathy earned on her investment in Malti Company stock. (Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whole dollar amount.)

Net present value

2. Did the Malti Company stock provide a 10% return?

Yes
No

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Managers of Coronado Embroidery have decided to purchase a new monogram machine and are considering two...

Finance
Q

hits and animals depend on each other 1 Observe Put one sprig of Elodea and...

Biology
Q

What is the measure of a single interior angle of a regul nonagon

Geometry
Q

why nobody answer my questions, and i post many questions but i did not recived...

Accounting
Q

Special Order William A. Smith Pest Control, Inc. (WASP) currently provides pest control services...

Accounting
Q

1) Which of the following tax credits is not refundable? A.Family tax credit. B.Saver's credit....

Accounting
Q

Steven Friedman's weekly gross earnings for the week ended April 22 were $1,906, and his...

Accounting
Q

Exercise 2.10 (Algo) Preparing a statement of owner's equity and a balance sheet. LO 2-5...

Accounting
Q

Sanford Company The Sanford Company had the following balance sheet as of December 31, 20x2....

Accounting
Q

A machine purchased three years ago for $302,000 has a current book value using straight-line...

Accounting
Q

47. A invests money in the business but has no management responsibility a. general partner...

Accounting
Q

QUESTION 27 Manufacturing overhead costs in an automobile manufacturing plant MOST likely include 1. labor...

Accounting