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Net Return and Assess with the Overall Market Return

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Rosa purchases shares of a company that recently executed an IPO at the post-offering market price of $35 per share, and she holds the shares for one year. She then sells her shares for $40 per share. The company does not pay dividends, and she is not subject to capital gains taxation. During this year, the return on the overall stock market was 13 percent. What net return did she earn on her share investment? Assess this return in light of the overall market return.

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Rosa purchases shares of a company that recently executed an IPO at the post-offering market price of $35 per share, and she holds the shares for one year. She then sells her shares for $40 per share. The company does not pay dividends, and she is not subject to capital gains taxation. During this year, the return on the overall stock market was 13 percent. This solution provide calculations for net return seen on her share investment.

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Net return which she earns in $= Dividend + Capital Gain
= ...

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