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Suzy Q buys stock on 1/1/2011 for ____________ per share, paying annual dividends of $27. On 12/31/2011, she sells the stock for $350. Her annual rate of return is -5.75%.

Suzy Q buys stock on 1/1/2011 for ____________ per share, paying annual dividends of $27. On 12/31/2011, she sells the stock for $350. Her annual rate of return is -5.75%.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Suzy Q buys stock on 1/1/2011 for ____________ per share, paying annual dividends of $27. On 12/31/2011, she sells the stock for $350. Her annual rate of return is -5.75%.
Expert Solution
Step 1: Analysis

We need to use annual rate of return formula to calculate buy price of stock.

A n n u a l space r a t e space o f space r e t u r n space equals fraction numerator left parenthesis S e l l space p r i c e space minus B u y space p r i c e right parenthesis plus A n n u a l space d i v i d e n d over denominator B u y space p r i c e end fraction

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