Answer:
The price of the stock is now $5.60
Step-by-step explanation:
$5.25 - $3.75 = $1.50
$1.50 + $1.85 + $2.25 = $5.60
The effective rate is calculated in the following way:

where r is the effective annual rate, i the interest rate, and n the number of compounding periods per year (for example, 12 for monthly compounding).
our compounding period is 2 since the bank pays us semiannually(two times per year) and our interest rate is 8%
so lets plug in numbers:
1-3=-2 so -2/8 is -1/4 so negative one fourth