An investor is thinking about buying some shares of Computer Engines, Inc., at $60 a share. She expects the price of the stock to raise to $100 a share over the next 3 years. During that time, she also expects to receive annual dividends of $3 per share. Given that the investor’s expectations (about the future price of the stock and the dividends it pays) hold up, what rate of return cash can she expect to earn on this investment?

To calculate the rate of return on this investment, we need to consider both the capital appreciation (increase in stock price) and the dividends received.

First, let's calculate the capital appreciation. The investor expects the price of the stock to increase from $60 to $100 over 3 years. The increase in stock price is $100 - $60 = $40 per share.

To calculate the annual capital appreciation, we divide the total increase by the number of years: $40 / 3 = $13.33 per year.

Next, let's calculate the dividends received per year. The investor expects to receive $3 per share annually.

To calculate the rate of return, we need to consider both the capital appreciation and the dividends received. We can calculate it as follows:

Rate of Return = (Annual Capital Appreciation + Annual Dividends) / Initial Investment * 100

The initial investment is the purchase price per share, which is $60.

Rate of Return = ($13.33 + $3) / $60 * 100 = $16.33 / $60 * 100 = 27.22%

Therefore, the investor can expect to earn a rate of return of 27.22% on this investment, assuming her expectations about the future price of the stock and the dividends hold up.

To calculate the rate of return on this investment, we need to consider the total return from both the increase in stock price and the annual dividends.

First, let's calculate the total return from the increase in stock price over 3 years. The stock price is expected to rise from $60 to $100, resulting in a gain of $100 - $60 = $40 per share.

Next, let's calculate the total return from the annual dividends over 3 years. The investor expects to receive $3 in dividends per share annually, so over 3 years, the total dividends would be $3 * 3 = $9 per share.

Now, let's calculate the total return by adding the gain from the stock price increase and the total dividends. The total return is $40 + $9 = $49 per share.

To calculate the rate of return, divide the total return ($49) by the initial investment ($60) and multiply by 100 to get the percentage: ($49/$60) * 100 = ~81.67%.

Therefore, the investor can expect to earn a rate of return of approximately 81.67% on this investment.