question archive You recently purchased a round lot (100 shares) of ABC stock that offered an attractive dividend
You recently purchased a round lot (100 shares) of ABC stock that offered an attractive dividend
Subject:FinancePrice: Bought3
You recently purchased a round lot (100 shares) of ABC stock that offered an attractive dividend. The stock cost $50 per share and offered an annualized dividend of $4.00 per share that is paid quarterly ($1.00 per share, per quarter). Assuming you reinvested your dividends when they were received each quarter into a mutual fund expected to provide a nominal 12% return compounded quarterly and then sold the stock for $75 per share at the end of the 5th year, calculate the overall growth rate of return on this 5-year investment. Round your cash flow calculations to the dollar.
