You invest $1,000 in Xenon Corporation stock (10 shares at $100 per share)
Question # 00176394
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Updated on: 01/20/2016 12:51 AM Due on: 01/20/2016
You invest $1,000 in Xenon Corporation stock (10 shares at $100 per share) and another $1,000 in a Xenon Corporation bond (1 bond with a $1,000 face value) that pays 8% interest annually. Xenon has a phenomenal year and distributes $5 per share to its shareholders. The stock's value also increases to $115 per share. The bond's price stays at $1,000.
What is your return on investment for each of these for the year?
Use the return shown on page 291: Return % = (Current income + Ending price - Beginning price) / Beginning price
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Rating:
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Solution: You invest $1,000 in Xenon Corporation stock (10 shares at $100 per share)