Serox shares were selling for $20 two years ago. The share sold for $25 one year ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the most recent year? (Round to the nearest per cent.)

Question

Quizplus · Accepted Answer

To calculate the rate of return, we need to use the following formula:
Rate of return = [(Ending price - Beginning price) + Dividend]/ Beginning price

Using the given information, we get:
Rate of return = [(28-25) + 1.1]/25
Rate of return = 0.148 or 14.8%

Rounding to the nearest percent, the rate of return is 15%. Option B is the closest, so the answer is B.

Serox Shares Were Selling for $20 Two Years Ago