A stock is bought for $22.00 and sold for $26.00 one year later,immediately after it has paid a dividend of $1.50.What is the capital gain rate for this transaction?

Question

Quizplus · Accepted Answer

Capital gain rate = (selling price + dividends received - buying price) / buying price
= (26 + 1.5 - 22) / 22
= 5.5 / 22
= 0.25
= 25%
Therefore, the capital gain rate for this transaction is 18.18% (rounded to two decimal places). The closest answer choice is D.

A Stock Is Bought for $22