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One year ago, Goran purchased 1 share of White Mountain Shipping stock. A share of White...

One year ago, Goran purchased 1 share of White Mountain Shipping stock. A share of White Mountain Shipping is currently priced at 116.27 dollars. White Mountain Shipping just paid an annual dividend of 4.68 dollars per share. If the stock’s percentage return was 11.3 percent over the past year (from one year ago to today), what was the price of the White Mountain Shipping share when Goran bought it?

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Answer #1

% return=(End value-Beginning value+Dividend)/Beginning value

0.113=(116.27-Beginning value+4.68)/Beginning value

0.113*Beginning value=120.95-Beginning value

Beginning value=120.95/(0.113+1)   

=$108.67(Approx).

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