Question

Jill purchased a share for $30 last year. She found out today that she had a...

Jill purchased a share for $30 last year. She found out today that she had a -100 per cent return on his investment. Which of the following must be true? Select one:

a. The share is worth $30 today

b. The share is worth $0 today

c. The share paid a dividend during the year.

d. Both b and c must be true.

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Answer #1

b. The share is worth $0 today

Return=(Dividend Paid+Ending Share Price)/Beginning Share Price-1

-100%=(Dividend+Ending Share Price)/30-1
=>Dividend+Ending Share Price=0

As Dividend>=0 and Ending Share Price>=0

So, Dividend=0 and Ending Share Price=0


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