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Problem:

We have a stock, which we buy at $60. It returns dividends of $20 per annum. We invest those dividends at an annual 8% in a bond. After 7 years, we disinvest from that bond at $150.

Required:

Question: Derive the simple annual ROR and the effective annual rate.

Note: Explain all steps comprehensively.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167980

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