Ahmet purchased a stock for $45 one year ago. The stock is now worth $65. During the year, the stock paid a dividend of $2.50. What is the total return to Ahmet from owning the stock?
A) 5%
B) 44%
C) 35%
D) 50%

Question

Quizplus · Accepted Answer

The total return is calculated by adding the capital gain and the dividend received, then dividing by the initial investment. The capital gain is $65 - $45 = $20. The dividend is $2.50. So, the total return is ($20 + $2.50) / $45 = $22.50 / $45 = 0.50 or 50%.

Ahmet Purchased a Stock for $45 One Year Ago