Consider a stock that had a price of $40 per share at the beginning of the year, paid $2 of dividends at the end of the year, and traded for $45 at the end of the year. This stock's return for the year is closest to:
A) 7.5 percent.
B) 11.1 percent.
C) 12.5 percent.
D) 15.6 percent.

Question

Quizplus · Accepted Answer

The stock's return is calculated as (Ending Price - Beginning Price + Dividends) / Beginning Price. Here, it is ($45 - $40 + $2) / $40 = $7 / $40 = 0.175 or 17.5 percent. However, the closest option provided is 15.6 percent.

Consider a Stock That Had a Price of $40 Per