Common Stock Is Held for Two Years, During Which Time

question 92

Multiple Choice

Common stock is held for two years, during which time it receives an annual dividend of $10.The stock was sold for $100 and generated an average annual return of 16 percent.What price was paid for the stock?

• A)$61.60
• B)$64.80
• C)$88.00
• D)$90.91

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Definitions:

Invoice

A document issued by a seller to a buyer that lists products or services provided along with the total amount due for payment.

Terms

Conditions and stipulations under which agreements and contracts are made, outlining the obligations of involved parties.

Mark-up

Additional pricing on goods’ cost aimed to cover running expenses and secure profit.

Cost

The amount of money required to purchase something or the expense incurred to produce something.