Josh Purchased 100 Shares of XOM for $76

question 84

Multiple Choice

Josh purchased 100 shares of XOM for $76.63 per share at the beginning of 2016. He received dividends per share of $1.37 (2016) , $1.55 (2017) , $1.66 (2018) , $1.74 (2019) , $1.85 (2020) . At the end of 2020 just after receiving the last dividend, he sold the stock for $84.76. What was his average annual rate of return form both dividends and capital gains? (Hint: compute the IRR, assume that all dividends were received at the end of the year.)

• A) 9.831%
• B) 3.774%
• C) 3.423%
• D) 4.076%

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Definitions:

Reimburse

To pay back or compensate someone for expenses incurred or losses suffered.

Bounce

The return of a paper check or electronic funds transfer due to insufficient funds in the account it was drawn on.

Liable

Being legally responsible or answerable for an act or a circumstance, often involving damage or injury.

Uncertified Check

An uncertified check is a personal or business check that has not been verified or guaranteed by the bank upon which it is drawn, as opposed to a certified check.