Assume That You Purchase Shares of a Company That Recently

question 28

Multiple Choice

Assume that you purchase shares of a company that recently executed an IPO at the post-offering market price of $32 per share,and you hold the shares for one year.You then sell your shares for $36 per share.The company does not pay dividends,and you are not subject to capital gains taxation.What net return did you earn on your share investment?

• A) 11.11%
• B) 12.00%
• C) 12.50%
• D) 13.00%

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Definitions:

Unique

Having a distinct characteristic, quality, or identity that makes something strictly one of a kind.

Pedipalps

Paired appendages near the mouth of arachnids (such as spiders and scorpions) used for sensing, feeding, or reproduction.

Pinchers

Also known as pincers, these are tools or parts of certain animals shaped to grip, compress, or cut objects.

Auricles

External parts of the ear outside the head, also known as pinnae, or the earlike appendages found in some animals and plants.