You bought a stock three years ago and paid $45 per share. You collected a $2 dividend per share each year you held the stock an
d then you sold the stock for $47 per share. What was your annual compound rate of return?
1 answer:
Answer:
5.84%
Explanation:
We use the RATE function that is shown in the excel. Kindly find the attachment below:
The NPER shows the time period.
Given that,
Present value = $45
Future value or Face value = $47
PMT = $2
NPER = 3
The formula is shown below:
= Rate(NPER,PMT,-PV,FV,type)
So, the annual compound rate of return is 5.84%
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