Question

You purchased 340 shares of a particular stock at the beginning of the year at a price of $77.03. The stock paid a dividend of $1.80 per share, and the stock price at the end of the year was $83.54. What was your dollar return on this investment?

Answer 1

Return on the investment = 10.8%

Step-by-step explanation:

The return on a stock is the sum of the capital gains(loss) plus the dividends earned.

Capital gain is the difference between he value of the stocks when sold and the cost of the shares when purchased.

Total shareholders Return =

(Capital gain/ loss + dividend )/purchase price × 100

So we can apply this to the formula:

Dividend = 1.8 × 340= $612

Capital gain = (83.54-77.03)× 340 =$ 2213.4

Cost of shares = 340 × 77.03= $26,190.2

% return = (612 + 2213.4)/ 26,190.2 × 100

= 10.8%