On January 2,20x1,Rebecca Brown purchased 800 shares of Bazooka Telecommunications common stock at $35 per share.The company paid a $1.50 dividend per share on December 28 of that year,and raised the amount by $0.50 per share for a distribution on December 28,20x2.Rebecca sold her entire investment on December 30,20x2,generating a $5,000 gain on the sale of stock.
Required:
A.

A.Prepare a dated listing of the cash inflows and outflows related to Rebecca's stock investment.Ignore income taxes.
B.Assume that Rebecca has a 10% hurdle rate for all investments.Rounding to the nearest dollar,compute the net present value of her investment in Bazooka and determine whether she achieved her 10% goal.
B.Rebecca achieved her goal,as indicated by the positive net present value.

Question

On January 2,20x1,Rebecca Brown purchased 800 shares of Bazooka Telecommunications common stock at $35 per share.The company paid a $1.50 dividend per share on December 28 of that year,and raised the amount by $0.50 per share for a distribution on December 28,20x2.Rebecca sold her entire investment on December 30,20x2,generating a $5,000 gain on the sale of stock.
Required:
A.
  
A.Prepare a dated listing of the cash inflows and outflows related to Rebecca's stock investment.Ignore income taxes.
B.Assume that Rebecca has a 10% hurdle rate for all investments.Rounding to the nearest dollar,compute the net present value of her investment in Bazooka and determine whether she achieved her 10% goal.
B.Rebecca achieved her goal,as indicated by the positive net present value.

Quizplus · Accepted Answer

The Answer of On January 2,20x1,Rebecca Brown purchased 800 shares of Bazooka Telecommunications common stock at $35 per share.The company paid a $1.50 dividend per share on December 28 of that year,and raised the amount by $0.50 per share for a distribution on December 28,20x2.Rebecca sold her entire investment on December 30,20x2,generating a $5,000 gain on the sale of stock.
Required:
A.
  
A.Prepare a dated listing of the cash inflows and outflows related to Rebecca's stock investment.Ignore income taxes.
B.Assume that Rebecca has a 10% hurdle rate for all investments.Rounding to the nearest dollar,compute the net present value of her investment in Bazooka and determine whether she achieved her 10% goal.
B.Rebecca achieved her goal,as indicated by the positive net present value.

On January 2,20x1,Rebecca Brown Purchased 800 Shares of Bazooka Telecommunications