1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
s344n2d4d5 [400]
3 years ago
13

Jason purchased ABC stock at $40 per share and DEF stock at $35 per share on the same day in 2015. Exactly 6 months later, the A

BC stock is worth $42.00 per share and has not paid a dividend while the DEF stock is worth $36 per share and has paid 2 quarterly dividends of $0.50 each. The holding period returns are _______.
A) ABC, $2.00 and DEF $2.00.
B) ABC 5% and DEF 2.9%.
C) ABC 5% and DEF 5.7%.
D) The holding period return cannot be determined because we do not know the discount rate.
Business
1 answer:
Pachacha [2.7K]3 years ago
7 0

Answer:

C) ABC 5% and DEF 5.7%

Explanation:

Data provided in the question:

Purchasing Cost of Stock ABC purchased = $40 per share

Purchasing Cost of Stock DEF purchased = $35 per share

Time = 6 months

Selling price of share of ABC = $42 per share

Selling price of DEF share = $36

Dividend paid to the DEF = $0.5 each quarter i.e $0.5 twice in 6 months

Thus,

Total dividend paid to DEF = $0.5 × 2

= $1

Now,

For ABC

Total return = Selling price - Purchasing Cost

= $42 - $40

= $2 per share

thus,

Holding period return = [ Total return ÷ Purchasing cost ] × 100%

= [ $2 ÷ $40 ] × 100%

= 5%

For DEF

Total return = Selling price + Dividend received - Purchasing Cost

= $36 + $1 - $35

= $2 per share

thus,

Holding period return = [ Total return ÷ Purchasing cost ] × 100%

= [ $2 ÷ $35 ] × 100%

= 5.7%

Hence,

option C) ABC 5% and DEF 5.7%.

You might be interested in
Can someone help me with this business worksheet
Sholpan [36]

Answer:

uhm heyyyy I can help

8 0
3 years ago
McCann Publishing has a target capital structure of 35% debt and 65% equity. This year's capital budget is $850,000 and it wants
levacccp [35]

Answer: $952500

Explanation: targeted equity ratio is 65% = 0.65

Capital budget = $850000

Dividend = net income - (target equity ratio × total budget)

400000 = N - (0.65 × 850000)

Make N the subject of formula

Net income N = $952,500

4 0
3 years ago
Which statement best describes payday leaders and pawnbrokers?
miv72 [106K]
C: They charge extremely high interest rates.
6 0
3 years ago
Read 2 more answers
Pigot Corporation uses job costing and has two production departments, M and A. Budgeted manufacturing costs for the year are as
zlopas [31]

Answer:

Correct option is D.

<u> $200,500 </u>

Explanation:

Manufacturing overhead = [($651,000/217,000) × $25,000] + [($417,000/834,000) × $29,000] = $89,500

Total cost associated with Job. No. 432 = $57,000 + $54,000 + $89,500 = $200,500

7 0
3 years ago
It is standard procedure to reject a job offer during the interview so you do not waste the time of the interviewer.
vivado [14]

Answer:

False.

Explanation:

In an interview for a job, there is no specific rule to be followed that an interviewee must follow. An interview is a perfect time to get to know more about the company's needs and also to advertise yourself.

But in case the job is no something that you like, then you must call the interviewer back and thank them for their time and also tell them the reason for the job rejection. Moreover, it is unethical to abruptly decline any job offer. Also, rejecting a job during the interview is not a standard procedure, for it will only make you seem more unethical and disrespectful.

Therefore, <u>it is not true that rejecting a job on the spot during an interview is a standard procedure.</u>

6 0
3 years ago
Other questions:
  • Investment A produced annual rates of return of 4%, 8%, 14% and 6% respectively over the past four years. Investment B produced
    9·1 answer
  • Which of the following design tips can help make a presentation clear and effective?
    13·2 answers
  • (a) Argue whether or not a firm should continue production if its MR is lower than its AVC. (b) Support your argument with expla
    6·1 answer
  • Sovereign immunity:
    10·1 answer
  • Salim sells fax machines that come in Standard and Enhanced models. The Standard model sells for $325 and the Enhanced model sel
    13·1 answer
  • The initial cost of a packed-bed degassing reactor for removing trihalomethanes from potable water is $84,000. The annual operat
    6·1 answer
  • The part of the technical report should follow this sequence
    11·1 answer
  • The race to the bottom scenario of global environmental degradation is explained roughly like this: a. Companies seek to reduce
    10·1 answer
  • In order to successfully carry out an acquisition, the managers at Pink Inc. prepared a list of potential target companies that
    7·1 answer
  • Short-term fluctuations experienced in the economy due to changes in levels of economic activity describe the?
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!