Yesterday Sandi sold 1,000 shares of stock that she owned for $45 per share. When she purchased

Question:

Yesterday Sandi sold 1,000 shares of stock that she owned for $45 per share. When she purchased the stock two years ago, Sandi paid $50 per share. Every three months during the time that she held the stock, Sandi received a quarterly dividend equal to $0.50 per share. A total of eight dividends were received.

(a) What return (yield) did Sandi earn during the two years she held the stock?

(b) If the price of the stock was $45 per share one year ago, what return did Sandi earn in each year she held the stock?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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