On January 2, 20X1, Bruce Greene invested $10,000 in the stock market and bought 500 shares of Heartland Development, Inc. Heartland paid cash dividends of $2.60 per share in 20X1 and 20X2; the dividend was increased to $3.10 per share in 20X3. On December 31, 20X3, Greene sold his holdings and generated proceeds of $13,000. Greene employs the net-present- value method and wants a 16% return on the investments.
Make a chronological list of the investment's cash flows.
Note: Greene is entitled to the 20X3 dividend. Calculate the investment's total present value, rounding computations to the closest dollar. Given the results of part (b), must Greene have acquired the Heartland stock? In brief describe.