Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the...
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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 $17,000 for 650 shares of Malti Company's common stock. She received a $481 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 16% on all of her investments. She is not sure whether the Malti Company stock provided a 16% return and would like some help with the necessary computations. (Ignore income taxes.) Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables. Required: a. Determine the net present value. (Round your answer to the nearest whole dollar.) Net present value $ 2,464 b. Did Kathy Myers earn 16% return on her investment? O Yes O No
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