About a year ago, Chris Beattie bought some shares in the Stratosphere Mutual Fund. He bought the

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About a year ago, Chris Beattie bought some shares in the Stratosphere Mutual Fund. He bought the stock at $24.50 a share, and it now trades at $26.00. Last year the fund paid dividends of 40 cents a share and had capital gains distributions of $1.83 a share. Using the approximate yield formula, what rate of return did Chris earn on his investment? Repeat the calculation using a handheld financial calculator. Would he have made a 20% rate of return if the stock had risen to $30 a share?

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Personal Financial Planning

ISBN: 9781439044476

12th Edition

Authors: Lawrence J. Gitman, Michael D. Joehnk, Randy Billingsley

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