question archive If the current market price of Intel stock is $111
If the current market price of Intel stock is $111
Subject:FinancePrice:2.86 Bought3
If the current market price of Intel stock is $111.8 and Intel pays $7.7 per share in dividends per year, what is the estimated 1-year rate of return if he expects the stock will be worth $150.6 in a year (after the dividends are paid)? a. Estimated 1-year rate of return -0.21 O b. Estimated 1-year rate of return 0.35 O c. Estimated 1-year rate of return 2.42 O d. Estimated 1-year rate of return 0.42
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Current price of intel stock i.e. P0 =$111.80
Dividend paid during the year = $7.7
Expected stock price in a year i.e. P1 = $150.60
Return on the stock = (P1+Dividend -P0)/P0
= (150.60+7.7-111.80)/111.80
=46.50/111.80
= 0.42
Hence estimated one year rate of return is 0.42
Thus the correct option is d i.e. 0.42
