Charlotte purchased a share for $50 a year ago.She received $2.40 in dividends and sold the stock for $52.If the inflation rate over the year was 2.6 percent,her exact real rate of return is

Name: Charlotte purchased a share for $50 a year ago.She received $2.40 in dividends and sold the stock for $52.If the inflation rate over the year was 2.6 percent,her exact real rate of return is
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Question

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Compute the nominal return,K = (2.4+52)/50 = 8.8%
then the real return,1.088/1.026-1 = 6.04%

Charlotte Purchased a Share for $50 a Year Ago