Suppose You Purchase One Share of the Stock of Mayfair

question 26

Multiple Choice

Suppose you purchase one share of the stock of Mayfair Company at the beginning of year 1 for $50. At the end of year 1, you receive a $1 dividend and buy one more share for $72. At the end of year 2, you receive total dividends of $2 (i.e., $1 for each share) and sell the shares for $67.20 each. The dollar-weighted return on your investment is

• A) 10.00%.
• B) 8.78%.
• C) 19.71%.
• D) 20.36%.

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Definitions:

Tools of Discovery

Procedures and methods used in litigation to gather facts and evidence before trial, including depositions, interrogatories, and document requests.

Interrogatories

A set of written questions from one party in a lawsuit to another party, which must be answered in writing and under oath.

Depositions

Testimonies of witnesses recorded under oath, outside of court, for later use in the litigation process.

Counterclaim

A claim made to offset another claim, typically in a legal proceeding by the defendant against the plaintiff.