f Volatile n at the E the end c 2 dividon

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Suppose you purchase one share of
the stock of Volatile Engineering
Corporation at the beginning of year 1
for $36. At the end of year 1, you
receive a $2 dividend and buy one
more share for $30. At the end of year
2, you receive total dividends of $4
(i.e., $2 for each share) and sell the
shares for $36.45 each. The dollar-
weighted return on your investment
is
Answers:
А. -1.75%.
B. 8.00%.
C. 4.08%.
D. 8.53%.
Е. 12.35%.
Transcribed Image Text:Suppose you purchase one share of the stock of Volatile Engineering Corporation at the beginning of year 1 for $36. At the end of year 1, you receive a $2 dividend and buy one more share for $30. At the end of year 2, you receive total dividends of $4 (i.e., $2 for each share) and sell the shares for $36.45 each. The dollar- weighted return on your investment is Answers: А. -1.75%. B. 8.00%. C. 4.08%. D. 8.53%. Е. 12.35%.
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