One year ago, you purchased 400 shares of Southern Cotton at $36.20 a share. During the past year, you received a total of $250 in dividends. Today, you sold your shares for $38.50 a share. What is your total return on this investment?

Question

Quizplus · Accepted Answer

The total return on an investment includes both the capital gains (or losses) and the dividends received. The capital gain per share is calculated as the selling price per share minus the purchase price per share, which is $38.50 - $36.20 = $2.30. For 400 shares, the total capital gain is $2.30 * 400 = $920. The total dividends received are $250. Therefore, the total return is the sum of the capital gain and dividends, which is $920 + $250 = $1170. The initial investment was 400 shares at $36.20 per share, totaling $14,480. The total return percentage is calculated as (Total Return / Initial Investment) * 100, which is ($1170 / $14,480) * 100 = 8.08%.

One Year Ago, You Purchased 400 Shares of Southern Cotton