Annual rate of return earned when the share was sold at $50 per share is 20%
Annual rate of return earned when the share was sold at $60 per share is 40%
<h3>How to calculate annual rate of return</h3>
Annual rate of return is given by the formula
let end of the year price = eyp
let beginning of the year price = byp
= {(eyp - byp) / byp} * 100
Annual rate of return at share price of $50 per share
when there is paying of dividends the value is added to the the eyp
eyp = 50 * 100 + 2 * 100 * 5 = 6000
byp = 50 * 100 = 5000
= {(6000 - 5000) / 5000} * 100
= 20%
Annual rate of return at share price of $60 per share
eyp = 60 * 100 + 2 * 100 * 5 = 7000
byp = 50 * 100 = 5000
= {(7000 - 5000) / 5000} * 100
= 40%
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