Suppose you purchase one share of the stock of VM Corporation at the beginning of year 1 for $36. At the end of year 1, you receive a $2 dividend and buy one more share for $30. At the end of year 2, you receive total dividends of $4 (i.e., $2 for each share) and sell the shares for $36.45 each. The dollar-weighted return on your investment is
A) −1.75%.
B) 4.08%.
C) 8.53%.
D) 8.00%.
E) 12.35%.

Question

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The Answer of Suppose you purchase one share of the stock of VM Corporation at the beginning of year 1 for $36. At the end of year 1, you receive a $2 dividend and buy one more share for $30. At the end of year 2, you receive total dividends of $4 (i.e., $2 for each share) and sell the shares for $36.45 each. The dollar-weighted return on your investment is
A) −1.75%.
B) 4.08%.
C) 8.53%.
D) 8.00%.
E) 12.35%.

Suppose You Purchase One Share of the Stock of VM