Josh Purchased 100 Shares of XOM for $76

question 126

Essay

Josh purchased 100 shares of XOM for $76.63 per share at the beginning of 2007.He received dividends per share of $1.37 (2007), $1.55 (2008), $1.66 (2009), $1.74 (2010), $1.85 (2011).At the end of 2011, just after receiving the last dividend, he sold the stock for $84.76.What was his average annual rate of return form both dividends and capital gains? (Hint: compute the IRR, assume that all dividends were received at the end of the year.)

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Definitions:

Product Life Cycle

The progression of a product through several stages from introduction to growth, maturity, and decline, affecting marketing and sales strategies.

Expenditures

The act of spending funds or money on goods, services, or activities, either for immediate needs or for future benefits.