McCoy paid a one-time special dividend of $3.40 on October 18, 2010. Suppose you bought

McCoy stock for $47.00 on July 18, 2010, and sold it immediately after the dividend was paid for

$63.52. What was your realized return from holding McCoy?

A) 4.24%

B) 6.36%

C) 33.91%

D) 42.38%

option (D) 42.38%

Explanation:

Data provided in the question:

Dividend paid = $3.40

Purchase price of stock = $47.00

Selling price = $63.52

Now,

Realized Return

= [ Selling price - Purchase Price + dividend ] : Purchase Price

= [ $63.52 - $47.00 + $3.40 ] : $47.00

= [ $16.52 + $3.40 ] : $47.00

= $19.92 : $47

= 0.4238

or

= 0.4238 * 100%

= 42.38%

Hence,

The correct answer is option (D) 42.38%