Christine Owns a Stock That Dropped in Price from $38

question 17

Multiple Choice

Christine owns a stock that dropped in price from $38.70 to $34.10 over the past year.The dividend yield on that stock is 1.4 percent.What is her total return on this investment for the year?

• A)-11.31 percent
• B)-10.49 percent
• C)-9.91 percent
• D)-9.59 percent
• E)-8.51 percent

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Definitions:

Capital Budgeting Models

Techniques used to evaluate the financial attractiveness of investment projects, including Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period.

After-Tax Cost

The expense associated with any financial transaction or investment after accounting for the effects of taxes, often used in net present value calculations.

Before-Tax Cost

Expenses or costs that are calculated without considering the effect of taxes.

Common Stock

The security representing ownership of a corporation. Equity.