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over the years 2016 to 2020. 2. Compute the total dollar return that
Wally will make from Hydro-Electric if he invests $6,000 in the stock
and all the dividend and price expectations are realized. 3.
If Wally
participates in the company’s dividend reinvestment plan, how many
shares of stock will he have by the end of 2020? What will they be
worth if the stock trades at $80 on December 31, 2020? Assume that
the stock can be purchased through the dividend reinvestment plan at
a net price of $50 a share in 2016, $55 in 2017, $60 in 2018, $65 in
2019, and $70 in 2020. Use fractional shares, to 2 decimals, in your
computations. Also, assume that, as in part b, Wally starts with 100
shares of stock and all dividend expectations are realized. c. Would
Wally be going to a different investment strategy if he decided to buy
shares in Hydro-Electric? If the switch is made, how would you
describe his new investment program? What do you think of this new
approach? Is it likely to lead to more trading on Wally’s behalf? If so,
can you reconcile that with the limited amount of time he has to
devote to his portfolio?
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FIN 402 Week 3 AssignmentCase Problem 7.1 Some
Financial Ratios Are Real Eye-Openers
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Case Problem 7.1 Some Financial Ratios Are Real Eye-Openers Jack
Arnold is a resident of Lubbock, Texas, where he is a prosperous
rancher and businessman. He has also built up a sizable portfolio of
common stock, which, he believes, is due to the fact that he
thoroughly evaluates each stock he invests in. As Jack says, ―You
can’t be too careful about these things! Anytime I plan to invest in a