Question

A share of stock currently sells for $60, pays an annual dividend of $4.00, and earned a rate of return of 20% over the past year. What did this stock sell for one year ago?

Answer 1

Answer:

stock sell for one year ago = $53.33

Explanation:

given data

stock currently sells = $60

annual dividend = $4.00

rate of return = 20%

to find out

stock sell for one year ago

solution

we get here stock sell price by rate of return year that is express as

rate of return over past year = (stock currently sells - stock sell + annual dividend) ÷ stock sell     ..............................1

20% = ($60 - stock sell + $4) ÷ stock sell

20% × stock sell = ($60 - stock sell + $4)

so stock sell for one year ago = $53.33