An investor owned shares worth $800 on Jan 1. On June 30 of the same year, the shares are worth $750. The stock paid no dividends during this period. The investor is hopeful that by Dec 31 of the same year, the shares will regain their value of $800. For this to happen, what annual rate of return on the investment is necessary over the second half of the year? A. 6.25% B 6.67% C. 12.11% D. 12.50% E 13.78%

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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An investor owned shares worth $800 on Jan 1. On June 30 of the same year, the shares are worth $750. The stock paid no dividends during
this period. The investor is hopeful that by Dec 31 of the same year, the shares will regain their value of $800. For this to happen, what annual
rate of return on the investment is necessary over the second half of the year?
A. 6.25%
B 6.67%
C. 12.11%
D. 12.50%
E 13,78%
Transcribed Image Text:An investor owned shares worth $800 on Jan 1. On June 30 of the same year, the shares are worth $750. The stock paid no dividends during this period. The investor is hopeful that by Dec 31 of the same year, the shares will regain their value of $800. For this to happen, what annual rate of return on the investment is necessary over the second half of the year? A. 6.25% B 6.67% C. 12.11% D. 12.50% E 13,78%
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