SOLUTION: My bank account pays an interest rate of 8% (I know, unbelievable). I'm considering buying a share of stock in ABC Corporation for $110. After 1, 2, and 3 years, it will pay a divi
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Question 909955: My bank account pays an interest rate of 8% (I know, unbelievable). I'm considering buying a share of stock in ABC Corporation for $110. After 1, 2, and 3 years, it will pay a dividend of $5. i expect to sell the stock after 3 years for $120.
Is this a good investment? I think the bank will pay more due to compounded interest, but I'm not entirely sure how to calculate the stock with the dividend (the dividend comes out, but does not get reinvested, correct?) Thank you for your help! Answer by richwmiller(17219) (Show Source):
