1. (25 points) One hundred shares of common stock were purchased at $80 per share. The stock pays an annual dividend of $2 per share, paid quarterly. If the annual rate of inflation is taken as 5% and if the investor wishes to realize a true gain of 4% per year, what would be the necessary market value of the stock at the end of a 10-year period?
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The total cost of purchasing the 100 shares of stock is calculated by multiplying the number of shares (100) by the price per share ($80). Total cost = 100 shares * $80/share = $8,000 Show more…
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