One Year Ago,you Purchased 400 Shares of Stock at a Cost

question 37

Multiple Choice

One year ago,you purchased 400 shares of stock at a cost of $8,650.The stock paid an annual dividend of $1.10 per share.Today,you sold those shares for $23.90 each.What is the capital gains yield on this investment?

• A)9.96 percent
• B)10.52 percent
• C)12.49 percent
• D)13.33 percent
• E)14.75 percent

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Definitions:

Contra Revenue Account

An account used to record reductions in gross revenue, such as discounts, returns, and allowances.

Operating Expense

Refers to the costs associated with the day-to-day functions of a business, excluding costs related to production.

Credit Terms

Conditions under which a seller will extend credit to a buyer, including repayment periods and interest rates.

Merchandise Return

Occurs when customers return previously purchased products to the seller, typically resulting in a refund or store credit.