Suppose you purchase one share of the stock of IBM at the beginning of year 1 for
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Question:
Suppose you purchase one share of the stock of IBM 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.
12.35%.
b.
8.00%.
c.
-1.75%.
d.
8.53%.
Related Book For
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III
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