A person purchased a share of Acme.com common stock exactly one year ago for $45. During the past year the common stock paid an annual dividend of $2.40. The person sold the security today for $85. What is the rate of return the firm has earned?

Question

Quizplus · Accepted Answer

The rate of return is calculated as [(Selling Price - Purchase Price + Dividend) / Purchase Price] * 100. Here, it is [(85 - 45 + 2.40) / 45] * 100 = 94.2%.

A Person Purchased a Share of Acme