Question

Sue purchased a stock for $26.50 a share, held it for one year, received a $1.34 dividend, and sold the stock for $28.45. What nominal rate of return did she earn

Answer 1

Answer:

the nominal rate of return she earned is 12.42%

Explanation:

The computation of the nominal rate of return she earned is shown below:

return = (sell price - buy price + dividend) ÷ buy price

= ($28.45 - $26.50 + 1.34) ÷ ($26.50)

= 12.42%

Hence, the nominal rate of return she earned is 12.42%

We simply applied the above formula so that the correct rate could come