Kelsey Drums, Inc., is a well-established supplier of fine percussion instruments to orchestras all over the United States. The company's class A common stock has paid a dividend of $4.11 per share per year for the last 19 years. Management expects to continue to pay at that amount for the foreseeable future. Kim Arnold purchased 100 shares of Kelsey class A common 8 years ago at a time when the required rate of return for the stock was 7.6%. She wants to sell her shares today. The current required rate of return for the stock is 2.60%. How much total capital gain or loss will Kim have on her shares?

Kelsey Drums, Inc., is a well-established supplier of fine percussion instruments to orchestras all over the United States. The company's class A common stock has paid a dividend of $4.11 per share per year for the last 19 years. Management expects to continue to pay at that amount for the foreseeable future. Kim Arnold purchased 100 shares of Kelsey class A common 8 years ago at a time when the required rate of return for the stock was 7.6%. She wants to sell her shares today. The current required rate of return for the stock is 2.60%. How much total capital gain or loss will Kim have on her shares?

Name: Kelsey Drums, Inc., is a well-established supplier of fine percussio
Uploaded: 2024-03-20T06:51:32.000Z
Channel: Bartleby
Description: Kelsey Drums, Inc., is a well-established supplier of fine percussion instruments to orchestras all over the United States. The company's class A common stock has paid a dividend of $4.11 per share per year for the last 19 years. Management expec

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter1: Introduction To Cost Management

Section: Chapter Questions

Problem 11P

See similar textbooks

Similar questions

Kelsey Drums, Inc., is a well-established supplier of fine percussion instruments to orchestras all over the United States. The company's class A common stock has paid a dividend of $4.84 per share per year for the last 14 years. Management expects to continue to pay at that amount for the foreseeable future. Kim Arnold purchased 300 shares of Kelsey class A common 5 years ago at a time when the required rate of return for the stock was 8.3%. She wants to sell her shares today. The current required rate of return for the stock is 5.30%. How much total capital gain or loss will Kim have on her shares? 1. The value of the stock when Kim purchased it was $____per share. (Round to the nearest cent.) 2.The value of the stock if Kim sells her shares today is $_______ per share. (Round to the nearest cent.) 3. The total capital gain (or loss) Kim will have on her shares is $_______. (Round to the nearest dollar. Enter a positive number for a capital gain and a negative…
John invested $12,000 in the stock of Hyper Cyber. Eight years later, Hyper Cyber's shares reached $125,000, but John held onto the shares in the belief that their price would double in the next five years. Unfortunately, Hyper Cyber did not double. Rather the market value of John's shares today is $4,000. If the shares were sold today and the proceeds invested in another investment, they would likely earn 5% per annum. Which of the following terms and values is correct? S250,000 is the opportunity cost a. b. $12.000 is the sunk cost C. $2000 is the opportunity cost d. $125,000 is the opportunity cost of selling the shares today
Two years ago, you purchased 100 shares of General Mills Corporation. Your purchase price was $61 a share, plus a total commission of $38 to purchase the stock. During the last two years, you have received total dividends of $2.48 per share. Also, assume that at the end of two years, you sold your General Mills stock for $66 a share minus a total commission of $36 to sell the stock. Calculate the total return for your investment and the annualized holding period yield. O Total return on the investment: $574. Annualized holding period yield: 4.70%. O Total return on the investment: $674. Annualized holding period yield: 5.52%. O Total return on the investment: $774. Annualized holding period yield: 6.34%. O Total return on the investment: $874. Annualized holding period yield: 7.16%.
John invested $12,000 in the stock of Hyper Cyber. Eight years later, Hyper Cyber's shares reached $125,000, but John held onto the shares in the belief that their price would double in the next five years. Unfortunately, Hyper Cyber did not double. Rather the market value of John's shares today is $4,000. If the shares were sold and the proceeds invested in another investment, they would likely eam 59% per annum. Which of the following terms and values is correct? • A S2000 is the opportunity cost • B. $125,000 is the opportunity cost of selling the shares today • C S250,000 is the opportunity cost • D. $12,000 is a sunk cost
ohn invested $12,.000 in the stock of Hyper Cyber Eight years later, Hyper Cyber's shares reached $125,000, but John held onto the shares in the belief that their price would double in the next five years. Unfortunately, Hyper Cyber did not double. Rather the market value of John's shares today is $4,000. If the shares were sold and the proceeds invested in another investment, they would likely eam 59% per annum. Which of the following terms and values is correct? $125,000 is the opportunity cost of selling the shares today $12,000 is a sunk cost $250,000 is the opportunity cost $2000 is the opportunity cost None of the above
You own 2,200 shares of Deltona Hardware. The company has stated that it plans on issuing a dividend of $0.42 a share at the end of this year and then issuing a final liquidating dividend of $2.90 a share at the end of next year. Your required rate of return on this security is 16 percent. Ignoring taxes, what is the value of one share of this stock to you today?
An investor purchased 500 shares of Electric Shaver Corporation stock at a price of $22.50 per share. One year later, the shares are selling for $21 each. The stock paid a dividend of $1.50 per share. What is the total percentage return on the investment?
The firm of X Ltd. purchased a share of ABC Ltd. common stock exactly one year ago for Ksh. 45. During the past year the common stock paid an annual dividend of Ksh. 2.40. The firm sold the security today for Ksh. 85. What is the rate of return that the firm has earned?
I have no idea how to calculate this return on investment. Help Wanted Two years ago, you purchased 100 shares of General Mills Corporation. Your purchase price was $59 a share, plus a total commission of $30 to purchase the stock. During the last two years, you have received the following dividend amounts: $1.85 per share for the first year and $1.98 per share the second year. Also, assume that at the end of two years, you sold your General Mills stock for $67 a share minus a total commission of $39 to sell the stock. Calculate the dividend yield for your General Mills stock at the time you purchased it. Note: Enter your answer as a percent rounded to 2 decimal places. Calculate the dividend yield for your General Mills stock at the time you sold it. Note: Enter your answer as a percent rounded to 2 decimal places. Calculate the total return for your General Mills investment when you sold the stock at the end of two years. Note: Do not round intermediate calculations. Round your…
Eastbrook Homes currently pays an annual dividend of $1.35 and plans on increasing that amount by 2.5 percent each year. Valley View Homes currently pays an annual dividend of $1.20 and plans on increasing its dividend by 3 percent annually. Given this information, you know for certain that the stock of Eastbrook Homes' has a higher ______ than the stock of Valley View Homes.
Xtinct Artifacts has not paid a dividend during the past 10 years. However, at the end of this year, the company plans to pay a $1.50 dividend and a $2 dividend the following year (Year 2). Starting in three years, the dividend will begin to grow by 5 percent each year for as long as the firm is in business. If investors require an 11 percent rate of return to purchase Xtinct’s common stock, what should be the market value of its stock today? please help with the for
Smiling Elephant, Inc., has an issue of preferred stock outstanding that pays a $5.90 dividend every year, in perpetuity. If this issue currently sells for $80.55 per share, what is the required return?