Suppose you invested $33 in Pfizer one month ago.It paid a dividend of $0.88 and you sold it right after the dividend was paid for $31.14.What was your realized return from holding the stock?
A)2.7%
B)8.7%
C)8.3%
D)-2.9%
E)-5.6%

Question

Quizplus · Accepted Answer

The realized return can be calculated using the following formula:
Realized Return = (Ending Price + Dividends - Beginning Price) / Beginning Price

Here, Beginning Price = $33, Dividend = $0.88, Ending Price = $31.14

Realized Return = (31.14 + 0.88 - 33) / 33 = -0.029 or -2.9%

Therefore, the answer is D) -2.9%.

Suppose You Invested $33 in Pfizer One Month Ago