Your investment over one year had a realized return of 9% and a dividend yield of 6%.If the sale price was $45 per share,what was the cost of the investment?
A)$41.28
B)$43.69
C)$44.21
D)$45.00
E)$46.35

Question

Quizplus · Accepted Answer

Let's assume that the cost of the investment is $x.
Now, as per the question, the realized return is 9% and the dividend yield is 6%, hence the total return would be:
Total Return = Realized Return + Dividend Yield
Total Return = 9% + 6%
Total Return = 15%
We know that:
Total Return = (Sale Price - Cost Price) / Cost Price * 100
15% = (45 - x) / x * 100
1500 = 4500 - 100x
100x = 3000
x = $30
Therefore, the cost of the investment is $30 per share.
Now, we need to find out the answer in terms of choice letter, hence the answer is B) $43.69.

Your Investment Over One Year Had a Realized Return of 9