Time value analysisassume that 10000 was invested in the, Ask an Expert

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(Time value analysis)

Assume that $10,000 was invested in the stock of General Medical Corporation with the intention of selling after one year. The stock pays no dividends, so the entire return will be based on the price of the stock when sold. The opportunity cost of capital on the stock is 10%. : Please show work

a. To begin assume the stock sales nets $11,500. What is the dollar return on the stock investment?

b. Assume that the stock price falls and the net is only $9,500 when the stock is sold. What is the dollar return and rate of return?

c. Assume the stock is held for two years. Now what is the dollar return and rate of return?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91546683

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