If a stock is purchased for $25 per share and held one year, during which time a $1.75 dividend is paid and the price climbs to $29.5, the nominal rate of return is:

A. 13.00%.

B. 14.00%.

C. 20.00%.

D. 25.00%.

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2 January, 14:08

If a stock is purchased for $25 per share and held one year, during which time a $1.75 dividend is paid and the price climbs to $29.5, the nominal rate of return is:

A. 13.00%.

B. 14.00%.

C. 20.00%.

D. 25.00%.

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Answers (1)

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Zain Schmidt · Answer 1

Nominal rate of return

= Future price - Current price + Dividend paid x 100

Current price

= $29.50 - $25.00 + $1.75 x 100

$25

= $6.25 x 100

$25

= 25%

Explanation:

The nominal rate of return equals future price minus current price plus dividend paid divided by current market price multiplied by 100.

If a stock is purchased for $25 per share and held one year, during which time a $1.75 dividend is paid and the price climbs to $29.5, the nominal rate of return is:A. 13.00%.B. 14.00%.C. 20.00%.D. 25.00%.

If a stock is purchased for $25 per share and held one year, during which time a $1.75 dividend is paid and the price climbs to $29.5, the nominal rate of return is:

A. 13.00%.

B. 14.00%.

C. 20.00%.

D. 25.00%.