What the dollar-weighted return on investment is

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Reference no: EM132745100

Problem 1: Suppose you purchase one share of the stock of Cereal Correlation Company at the beginning of year 1 for $50. At the end of year 1, you receive a $1 dividend and buy one more share for $72. At the end of year 2, you receive total dividends of $2 (i.e., $1 for each share) and sell the shares for $67.20 each. The dollar-weighted return on your investment is

A. 10.00%.

B. 8.78%.

C. 19.71%.

D. 20.36%.

Reference no: EM132745100

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