An investor bought 100 shares of Omega common stock for $14,000. He held the stock for 9 years. For the first 4 years he received annual end-of-year dividends of $800. For the next 4 years he received annual dividends of $400. He received no dividend for the ninth year. At the end of the ninth year he sold his stock for $6000. What rate of return did he receive on his investment?

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter19: Corporations: Distributions Not In Complete Liquidation
Section: Chapter Questions
Problem 47P
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An investor bought 100 shares of Omega common stock for $14,000. He held the stock for 9 years. For the first 4 years he received annual end-of-year dividends of $800. For the next 4 years he received annual dividends of $400. He received no dividend for the ninth year. At the end of the ninth year he sold his stock for $6000. What rate of return did he receive on his investment?

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