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20 April, 07:06

A share of stock currently sells for $60, pays an annual dividend of $4.00, and earned a rate of return of 20% over the past year. What did this stock sell for one year ago?

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  1. 20 April, 07:19
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    stock sell for one year ago = $53.33

    Explanation:

    given data

    stock currently sells = $60

    annual dividend = $4.00

    rate of return = 20%

    to find out

    stock sell for one year ago

    solution

    we get here stock sell price by rate of return year that is express as

    rate of return over past year = (stock currently sells - stock sell + annual dividend) : stock sell ... 1

    20% = ($60 - stock sell + $4) : stock sell

    20% * stock sell = ($60 - stock sell + $4)

    so stock sell for one year ago = $53.33
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