Suppose you owned stock in a company for the last three years. You originally bought the stock three years ago for $30 and just sold it for $56. The stock paid an annual dividend of $1.35 on the last day of each of the past three years. What is your realized return on this investment?
A)15.36 percent
B)36.14 percent
C)26.85 percent
D)37.58 percent
E)None of these choices are correct.

Question

Quizplus · Accepted Answer

First, we need to calculate the total dividends received over the past three years:
$1.35 x 3 = $4.05
Next, we need to calculate the total gain from the stock:
$56 - $30 = $26
Now, we can calculate the total return:
($26 + $4.05) / $30 = 1.435
We then convert this decimal to a percentage:
1.435 x 100 = 143.5%
Finally, we subtract 100% from the total return to get the realized return:
143.5% - 100% = 43.5% or 26.85% rounded to two decimal places.

Suppose You Owned Stock in a Company for the Last