An investor buys stock for $10,000 at the beginning of the year. She earns dividends of $300 during the course of the year. At the end of the year, the stock is worth $10,800. The tax rate on dividends and capital gains is 15 percent. The inflation rate is 3 percent. What is the real return accrued on the stock at the end of the year, provided the investor does not sell the stock?
A. 6.35 percent.
B. 6.95 percent.
C. 7.55 percent.
D. 8 percent.
Answer: C
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