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Svetlanka [38]
3 years ago
5

If an $80 stock pays a quarterly dividend of $1 what is the implied annual rate of return

Business
1 answer:
Sonja [21]3 years ago
3 0
An annual rate of return is the amount of loss or gain made through an investment in a yaear based on the percentage of intial investment.

In this case, since the quarterly divident is $1, in one year it would be:
$1 x 4 = $4

So, the annual rate of return would be $4 / $80  x 100%  = 2%
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Answer: $460 billion, but the effect would be larger if there were an investment accelerator.

Explanation:

If the MPC = 0.75 and there is no investment accelerator or crowding out, then a $115 billion increase in the government expenditures would result in the shift in the aggregate demand curve right by:

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