Unformatted text preview: your answer to the nearest 0.1% per year. 4. Kelvin purchased 100 shares of IBM, Inc. (IBM) on Feb 8, 2005 at $93.30 per share. That was the ex-dividend date for the first quarter of 2005, which means the day after the quarterly dividend was paid. Kelvin saw the stock market crash coming and sold his IBM shares on Aug. 6, 2008 (just after being paid his 14 th quarterly dividend), at a price of $128.81 per share. If the quarterly dividend during that time was $0.30 per share, what was Kelvin’s annual return on his IBM investment? 5. What if Kelvin hadn’t seen the crash coming? Assume he had to sell his shares on Feb. 6, 2009 (just two quarters later) at $91.47 per share. What would his annual return on investment have been? HINT: Start with an interest rate of zero and note that (P|F,0%,n) = 1 and (P|A,0%,n) = n....
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- Fall '08
- annual return, Kelvin, Dell computer, quarterly dividend