Julio purchased a stock one year ago for $27. The stock is now worth $32, and the total return to Julio for owning the stock was 37 percent. What is the dollar amount of dividends that he received for owning the stock during the year? Round your final answer to nearest whole dollar.
A) $4
B) $5
C) $6
D) $7

Question

Quizplus · Accepted Answer

The total return is 37%, which means Julio's total gain is 37% of the initial $27 investment, equating to $9.99. The capital gain from the stock price increase is $32 - $27 = $5. Therefore, the dividends received must be $9.99 - $5 = $4.99, which rounds to $5.

Julio Purchased a Stock One Year Ago for $27