You Purchase a Share of CAT Stock for $90

question 62

Multiple Choice

You purchase a share of CAT stock for $90. One year later, after receiving a dividend of $4, you sell the stock for $97. What was your holding-period return?

• A) 14.44%
• B) 12.22%
• C) 13.33%
• D) 5.56%

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Definitions:

General Journal Entry

A record in accounting that shows the debit and credit transactions affecting the financial statements, often used for non-routine and complex transactions.

Cash Sale

A transaction in which goods or services are paid for at the time of the sale using cash or other immediate forms of payment.

Credit Sale

A transaction where goods or services are provided to a customer with the agreement that payment will be made at a later date.

Record Keeping

The practice of maintaining and preserving documents, files, and records related to financial transactions for future reference.