Question

Say that your broker charges you a commission of $1,340.75 for your purchase of 258 shares of stock in Ergar Appliances. If Ergar Appliances has a list price of $73.96 and pays a dividend of $11.45 per share, what is your annual yield?
a.
0.1548
b.
0.1446
c.
0.1924
d.
0.0691


Please select the best answer from the choices provided

A
B
C
D

Answer 1

Answer:YOUR ANSWER IS B ON EGDE YOU GOT THIS

B. 0.1446

Explanation:

Yield refers to the benefits or earnings realized from an investment over a particular period.

Calculation of yield considers the profits made and the amounts invested.

The amount invested in this case

The commission =$1,340.75

Costs of the shares = 258 x  $73.96  =$19,081. 68

Total cost of investment

= $19,081. 68 + $1,340.75

= $20,422.43

The gain realized  = $11.45  x 258

=$2,954.1

Annual yield= =$2,954.1/$20,422.43

=0.144649

=0.1446

Explanation:

Answer 2

Answer:

B. 0.1446

Explanation:

Yield refers to the benefits or earnings realized from an investment over a particular period.

Calculation of yield considers the profits made and the amounts invested.

The amount invested in this case

The commission =$1,340.75

Costs of the shares = 258 x  $73.96  =$19,081. 68

Total cost of investment

= $19,081. 68 + $1,340.75

= $20,422.43

The gain realized  = $11.45  x 258

=$2,954.1

Annual yield= =$2,954.1/$20,422.43

=0.144649

=0.1446