If you invest $2,000 in a stock and the stock pays you $35 in dividends each year and is worth $2,150 at the end of one year,then what is your rate of return?
A)9.25%
B)8.25%
C)7.25%
D)6.25%
E)5.25%

Question

Quizplus · Accepted Answer

The rate of return can be calculated by adding the dividends received to the appreciation in stock value, then dividing by the initial investment and converting to a percentage. Here, ($35 + ($2150 - $2000)) / $2000 = $185 / $2000 = 0.0925 or 9.25%.

If You Invest $2,000 in a Stock and the Stock