You recently purchased a stock for $25.It is now worth $35,and it paid a $5 dividend during the time you held it.Your rate of return on this stock is closest to which of the following?
A)60%
B)-20%
C)43%
D)40%

Question

Quizplus · Accepted Answer

The rate of return can be calculated by taking the total gains (or losses) and dividing it by the initial investment. Here, the gains include both the increase in stock value ($35 - $25 = $10) and the dividend paid ($5), totaling $15. The initial investment was $25. Thus, the rate of return is ($15 / $25) * 100% = 60%.

You Recently Purchased a Stock for $25