Question

A stock was trading at $124.55 at the end of year 1. It was trading at the end of year 2 at $117.85 immediately after giving a dividend of $4.90. At the end of year 3. it was trading at $128.05 immediately after giving a dividend of $5.10. Finally, it was trading at $138.15 at the end of year 4 without giving out any dividend. What was the arithmetic average annual return of this stock for the three years between years 1 and 4

a) 5.83%

b) 5.99%

c) 6.15%

d) 6.31%

e) 6.47%

Answer 1

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