Suppose you buy stock at a price of $83 per share. Three months later, you sell

Question

Suppose you buy stock at a price of $83 per share. Three months later, you sell it for $89. You also received a dividend of $.38 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 $83 per share. Three months later, you sell it for $89. You also received a dividend of $.38 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

Purchase price                              83.00 Sale Price                              89.00 Profit on Sale(89-83)                                6.00 Dvidend received                                0.38 Total return (Profit+Div)(6+.38)                                6.38 Investment                              83.00 Return for 3 Months = 6.38/83 *100 7.69% Annualised return = (1+.0769)^4 - 1 Annualised return = 1.34494 - 1 Annualised return = 34.49%

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