KellyAnne Public Relations just paid an annual dividend of $1.27 on its common stock and increases its dividend by 3.4 percent annually.What is the rate of return on this stock if the current stock price is $38.56 a share?

Question

Quizplus · Accepted Answer

The rate of return on a stock is calculated by dividing the annual dividend by the current stock price. In this case, the annual dividend is $1.27 and the current stock price is $38.56, so the rate of return is $1.27/$38.56 = 0.0681, or 6.81%.

KellyAnne Public Relations Just Paid an Annual Dividend of $1