ABC stock pays a $1.80 annual dividend. The market price of the stock was $21.74, $19.83, $22.60, and $23.10 at the end of the past four years, respectively. Based on this information, what is the mean rate of return?

Question

Quizplus · Accepted Answer

The mean rate of return is calculated by averaging the annual returns. The annual return for each year is calculated by adding the dividend to the price change and dividing by the initial price. The average of these returns gives approximately 10.91%.

ABC Stock Pays a $1