Celine Purchased 5,000 Shares of Stock for $500,000

Multiple Choice

Celine purchased 5,000 shares of stock for $500,000. A year later the stock is valued at $650,000. Instead of selling the stock, Celine held onto it for another year. Which of the following is true?

A) The $150,000 increase in the value of the stock represents a dividend.
B) The $150,000 increase in the value of the stock represents an unrealized capital gain.
C) To determine the capital gain, it is first necessary to know the normal rate of return on capital.
D) The total capital gain will be at least $150,000.