Assume that you purchased 100 shares of a stock for $50 a share,that you received an annual dividend of $2.50 a share,and that you sold your stock for $60 a share at the end of one year.What is the total return on your investment?

Question

Quizplus · Accepted Answer

The total return on the investment includes both the capital gain and the dividends received. The capital gain is calculated as ($60 - $50) * 100 shares = $1,000. The dividend income is $2.50 * 100 shares = $250. Therefore, the total return is $1,000 (capital gain) + $250 (dividends) = $1,250.

Assume That You Purchased 100 Shares of a Stock for $50