One Year Ago, You Purchased 600 Shares of a Stock

question 35

Multiple Choice

One year ago, you purchased 600 shares of a stock.This morning you sold those shares and realized a total return of 3.1 percent.Given this information, you know for sure the:

• A)stock price increased by 3.1 percent over the last year.
• B)stock increased in value over the past year.
• C)stock paid a dividend.
• D)dividend yield is greater than zero.
• E)sum of the dividend yield and the capital gains yield is 3.1 percent.

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Definitions:

Opening Balance Sheet

The initial financial statement of a company, showing assets, liabilities, and equity at the start of a new accounting period.

Pooling Method

A method used in accounting for business combinations where the assets and liabilities of the combining companies are simply pooled together and recorded at historical cost.

Recognition Differences

Discrepancies that occur when financial transactions are recognized at different times or amounts in financial statements.

Financial Reporting

Financial reporting involves the disclosure of financial information to the various stakeholders about the financial performance and position of an organization over a specific period.