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Your investment over one year yielded a capital gains yield of 5% and no dividend yield. If the
sale price was $114 per share, what was the cost of the investment?
A) $119.43
B) $103.14
C) $108.57
D) $114.00

Respuesta :

pedrocarratore

Answer:

C) $108.57

Explanation:

Given data:

Capital gains yield (CGY) = 5%

Dividend yield = 0%

Sale price (S) = $114 per share

Capital gains yield is defined as a function of initial investment (I) and sale price (S) as follows:

[tex]CGY= \frac{S-I}{I}\\ 0.05 = \frac{114-I}{I} \\I=\frac{114}{1.05} \\I= \$ 108.57[/tex]

The initial cost of the investment was $108.57.

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