An investor purchases a share for £5.31 at the beginning of the year. Six months later, the investor receives a dividend of £0.03 (net of tax) and immediately sells the share for £5.53. Capital gains tax of 30% is paid on the difference between the sale and the purchase price. Calculate the net annual effective rate of return the investor obtains on the investment. 数字 % Enter a percentage correct to 2 decimal places

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA3: Time Value Of Money
Section: Chapter Questions
Problem 3CE
icon
Related questions
Question
An investor purchases a share for £5.31 at the beginning of the year. Six months later, the investor receives a dividend of £0.03 (net of tax) and immediately
sells the share for £5.53.
Capital gains tax of 30% is paid on the difference between the sale and the purchase price.
Calculate the net annual effective rate of return the investor obtains on the investment.
数字
%
Enter a percentage correct to 2 decimal places
Transcribed Image Text:An investor purchases a share for £5.31 at the beginning of the year. Six months later, the investor receives a dividend of £0.03 (net of tax) and immediately sells the share for £5.53. Capital gains tax of 30% is paid on the difference between the sale and the purchase price. Calculate the net annual effective rate of return the investor obtains on the investment. 数字 % Enter a percentage correct to 2 decimal places
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning