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Talja [164]
3 years ago
14

7. Rate of Return. A stock is selling today for $40 per share. At the end of the year, it pays a dividend of $2 per share and se

lls for $44. a. What is the total rate of return on the stock? b. What are the dividend yield and percentage capital gain? c. Now suppose the year-end stock price after the dividend is paid is $36. What are the dividend yield and percentage capital gain in this case?
Business
1 answer:
LenKa [72]3 years ago
6 0

Answer:

a 15%

b dividend yield: 5%

  capital gain 10%

c if year-end price decrease to $36 then capital gain:

36/40 - 1 = -10%

negative 10%  thus, a 10% loss.

Explanation:

Beginning of the year price:: 40

At the end of the year:

dividends $ 2.00

Price: $44

<u>Total rate of return:</u>

(44 + 2) / 40 - 1 = 46/40 -1 = 0.15 = 15%

<u>Dividend Yield: </u>dividend per share/ price per share

$2 / 40 = 0,05 = 5%

<u>capital gain:</u>  end-year /beginning - 1

44 / 40 - 1 = 0.10 = 10%

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The given statement " Texas ranks in terms of state spending per capita and it ranks in terms of how much money it gets from the federal government " is TRUE

Explanation:

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i. $ 3,831.00B/2007

Texas is the 43rd largest state and federal government on total per capita general spending.

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3 years ago
Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the c
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Answer:

Windhoek Mines, Ltd.

The net present value of the proposed mining project is:

=  ($232,950).

Explanation:

a) Data and Calculations:

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Working capital required  = $100,000

Annual net cash receipts = $120,000

Cost to construct new roads in three years = $40,000

Salvage value of equipment in four years = $65,000

Estimated useful life of mine = 4 years

Working capital released in four years = $100,000

Required rate of return = 20%

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Cost of new equipment and timbers  $500,000      1               -$500,000

Working capital required                        100,000       1                 -100,000

Annual net cash receipts                       120,000     2.589            310,680

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Salvage value of equipment in 4 years 65,000     0.482               31,330

Working capital released in 4 years     100,000     0.482              48,200

Net present value                                                                      ($232,950)

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