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Assume you sell for $100,000 a 10 percent ownership stake in a future payment one year from now of $1.5 million. A. What are you saying about the implied return for the 10 percent owner

Sagot :

Explanation:

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The implied return which is the rate of return will be 50%.

Based on the information given, the dollar return will be:

= $1,500,000 × 10%

= $1,500,000 × 0.1

= $150,000.

The implied return will now be:

= ($150000 - $100000) / $100000 × 100

= 50000/100000 × 100

= 0.5 × 100

= 50%

Therefore, the implied return is 50%.

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