Question

Twelve years ago, an investor bought a certain number of shares of stock for which he paid p 100 per share. at the end of each year, for the next 6 years, he received dividends of p 20 per share. thereafter he received p 10 per share at the end of each year for the next 6 years. if he sells this stock now at p 90 per share, what rate of return will he receive?

Answer 1

The investor will sit at a rate of return of around 170% overall in the given condition.

Who is an investor?

A person who engages money into one or more classes of investment with an intention to earn monetary returns is known as an investor. In the given condition, the returns of the investor will be calculated as:

$\rm Returns= Dividend\ for\ 12\ Years- Capital\ Loss\\\\\rm Returns= (120+60)-(10)\\\\\rm Returns= 170$

Thus, the value of total portfolio of the investor will be p 270 and the rate of return will be calculated as 170%.

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