Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
Afterpay Ltd (ASX symbol, APT) pays a dividend on its preferred equity of $0
Afterpay Ltd (ASX symbol, APT) pays a dividend on its preferred equity of $0.4 semi-annually (twice every year). If the price of the preferred equity is $8 per share, what is the effective annual required return?
Select one:
a) 10.25%
b) 10.00%
c) 21.55%
d) 5.00%
You purchase 1,000 shares of Blackmores Ltd stock for $40 per share. A year later, the shares pay a dividend of $1.20 per share and sell for $50. What is your total percentage return?
Select one:
a) 3.0%
b) 25.0%
c) 28.0%
d) 50.0%
Expert Solution
Computation of the effective annual required return:-
Required return = Annual dividend / Current price
= $0.4 * 2 / $8
= $0.8 / $8
= 10%
Correct option is b) 10.00%
Computation of the total percentage return:-
Total return = (Selling price + Dividends - Purchase price) / Purchase price
= ((1,000 * $50) + (1,000 * $1.20) - (1,000 * $40)) / (1,000 * $40)
= ($50,000 + $1,200 - $40,000) / $40,000
= $11,200 / $40,000
= 28%
Correct option is c) 28.00%
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
