You Bought a Stock for $30 and After 10 Years

question 37

Essay

You bought a stock for $30 and after 10 years sold it for $50. It paid an annual dividend of $2. Set up an equation that illustrates how the annual return is determined. Show that this return is not 14%.​

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Definitions:

Foreign Investment

Foreign investment involves capital flows from one country to another, granting the investor ownership stakes in foreign companies or assets, aiming for future returns on the investments.

Creditors

Individuals or institutions that lend money or extend credit, expecting to be repaid, usually with interest.

Great Recession

A severe global economic downturn that occurred from late 2007 through mid-2009, marked by significant declines in GDP, high unemployment, and financial instability.

Trade Deficit

A situation where a country's imports exceed its exports during a specific period, leading to a negative balance of trade.