Calculate the annual effective rate of return realized

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Question 1: You buy a preferred stock for $ 20. This share pays a quarterly dividend of $ 0.40. You sell the stock two years later when the market demanded rate is 7% annualized quarterly. Calculate the annual effective rate of return you realized by holding this stock for two years and assuming the dividends were reinvested at the annual rate of 6% capitalized quarterly.

Reference no: EM132873613

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