Suppose you buy stock at a price of $59 per share. Five months later, you sell i

Question

Suppose you buy stock at a price of $59 per share. Five months later, you sell it for $63. You also received a dividend of $.48 per share. What is your annualized return on this investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Suppose you buy stock at a price of $59 per share. Five months later, you sell it for $63. You also received a dividend of $.48 per share. What is your annualized return on this investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Explanation / Answer

Return for the period = ($63 - $59 + $0.48) / $59

= 7.59%

Annualized return = [(1 + 7.59%)12/5 - 1] * 100%

= 19.19%

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