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The Price of ABC Stock to Achieve a 10% Rate of Return

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Fred Flintlock wants to earn a total of 10 percent on his investments. He recently purchased shares of ABC stock at a price of $20 a share. The stock pays a $1 a year dividend. What is the price of ABC stock Fred is to achieve his 10 percent rate of return?

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This solution calculates the price of a stock based on a 10% rate of return.

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10% Return on $20= 10%*20=$2
Earnings from dividend is $1, ...

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