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Suppose that you invested $10,000 dollars using the dollar-cost-averaging approach. Assume that on Feb-1-10, and on Feb-1-11, you purchased $5,000 worth of stock (each year). You then held the shares until they were sold on Feb-1-2014 (assume you received the dividend in all these years and dividends were reinvested). What is the ROI on your investment over the holding period (4 years)? _______________ Hint: create a spreadsheet of your cash flows and solve for the IRR. Note: you only get the $1.20 dividend in 2011 on the shares purchased in 2010. Assume that you get the $1.70 dividend on shares purchased in 2014 just before you sold those shares.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M91372581

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