Question

Suppose you purchased a stock a year ago. Today, you receive a dividend of $16 and you sell the stock for $99. If your return was 11%, at what price did you buy the stock

Answer 1

Answer: 103.60

Explanation:

From the question, we are informed that a stock was purchased a year ago and that today, a dividend of $16 was gotten and the stock was sold for $99 while the return was 11%.

The price that the stock was bought will be:

= (Dividend + Stock sale)/(1 + Return)

= (99 + 16) /(1 + 11%)

= =(99+16)/1.11

= 103.60