Francis purchased a stock one year ago for $20, and it is now worth $24. The stock paid a dividend of $3 during the year. What was the stock's rate of return from capital appreciation during the year? (Round your answer to the nearest percent.)

Question

Quizplus · Accepted Answer

The capital appreciation during the year is the increase in the stock price minus the dividends paid, divided by the initial stock price:
(24 – 20 – 3) / 20 = 1 / 5 = 0.20 or 20%.

Francis Purchased a Stock One Year Ago for $20, and It