Yesterday Sanjay sold 1,000 shares of stock that he owned for $45 per share. When he purchased the stock two years ago, Sanjay paid $50 per share. Every three months during the time that he held the stock, Sanjay received a quarterly dividend equal to $0.50 per share. A total of eight dividends were received.
a. What return (yield) did Sanjay earn during the two years he held the stock?
b. If the price of the stock was $45 per share one year ago, what return did Sanjay earn in each year he held the stock?