You purchased Butterfly Wing Corp. stock exactly one year ago at a price of $77.66 per share. Over the past year, the stock paid dividends of $2.92 per share. Today, you sold your stock and earned a total return of 15.84 percent. What was the price at which you sold the stock

Question

Business

Rowan Hodge

21 March, 05:53

You purchased Butterfly Wing Corp. stock exactly one year ago at a price of $77.66 per share. Over the past year, the stock paid dividends of $2.92 per share. Today, you sold your stock and earned a total return of 15.84 percent. What was the price at which you sold the stock

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Answers (1)

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Charity Mullen · Answer 1

The shares were bought at a price of $26.981

Explanation:

The price of the share be represented as "y "

Capital gain = (y - 77.6)

Dividend = 2.92

Total return in dollar = (y - 77.6) + 2.92

total return in % = 15.84%

Return (%) = ((y - 77.6) + 2.92) / 77.66 = 15.84%

((y - 77.6) + 2.92) / 77.66 = 0.1584

cross multiplying

((y - 77.6) + 2.92) = 77.66 * 0.1584

y - 14.68 = 12.301344

Collecting like terms

y = 26.98

The shares were bought at a price of $26.981