Question

Ne year ago, you purchased 230 shares of titan wood products for $55.73 per share. the stock has paid dividends of $.63 per share over the past year and is currently priced at $60.70. what is your total dollar return on your investment? multiple choice

-$1,288.00
-$1,143.10
-$1,330.93
-$1,215.55
-$644.00

Answer 1

The total dollar return on the investment is the sum of the dividend income and the capital gains, which is $1290.00.

Step-by-step explanation:

To calculate the total dollar return on an investment in stock, we must consider two elements: the dividends received and the capital gains (or losses) realized. This is done by adding the income from dividends to the difference between the current stock price and the purchase price, multiplied by the number of shares.

In this scenario, 230 shares of Titan Wood Products were purchased at $55.73 per share and dividends of $0.63 per share were paid. The current stock price is $60.70. The total dividend income is 230 shares × $0.63 per share. The capital gains are calculated as (Current Stock Price - Purchase Price) × Quantity, which is (60.70 - 55.73) × 230.

So, the total dollar return is:

Total dividend income = 230 × 0.63 = $144.90

Capital gains = (60.70 - 55.73) × 230 = $5 × 230 = $1145.1

Then, Total Return = Total dividend income + Capital gains = $144.90 + $1145.1 = $1290.