Suppose you purchased a share of stock for $50 one year before, sold it today for $60, and throughout the year received 3 dividend payments totalling $2.7, compute the following.
ii) capital gain(or less)
iii) total return
(1) in dollars
(2) as a percentage of the initial investment Q4.2
2) Two investments present the series of cash payments over 4 years, as given in the table below:
year1 year2 year3 year4
Investment: 1 $100 $200 $300 $400
2 $250 $250 $250 $250
i) Compute the total amount of money paid by each investment over 4 years?
ii) From a time value of money perspective, which of these investments is more favourable?
iii) Can you think of a cause why investors might favour investment 1?