Answer : 7.43 %

Working notes for the above answer is as under

The holding period return is the  sum of the capital gains return and the dividend or interest income return:

R = [(P1-P0+D) / P0] –1.

In this sum we can say that, no capital gain,  because the sale price (P1) is the same as the purchase price (P0=$49).

P1 =P0

49=49

The total return before-tax income is therefore the  dividend of $4, of which 0.3 x $4 = $1.2 is taxable income (after the 70% exclusion).

Taxes therefore are equivalent to $0.36, for an aftertax income of $3.64 = $2.80 (tax-free) + $0.84 (after tax) and a rate of return of  7.43%

7.43% = ($43.64/$49)-1

=1.0743-1

=0.0743

=7.43%