Basic concepts in Finance
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A. Mr. Darden sold his house for $165,000. He bought it for $55,000 nine years ago. What is the annual return on his investment?
B. An issue of common stock has just paid a dividend of $3.75. Its growth rate is 8%. What is its price if the market's rate of return is 16%?
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Solution Summary
There are two problems. Solution to first problem describes the steps to calculate annual return in the given case. Solution to second problem estimates the current price of a stock.
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Mr. Darden sold his house for $165,000. He bought it for $55,000 nine years ago. What is the annual return on his investment?
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- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
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