A the beginning of 2012,you pay $100 for a share of stock that then pays you a dividend of $1 at the beginning of 2013.If the stock price rises from $100 to $109 per share over the year,then you have earned an annual rate of return of

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The annual rate of return is calculated by taking the total gain (price increase plus dividend) divided by the initial price. The stock price increased by $9 ($109 - $100) and you received a $1 dividend, totaling a $10 gain. The rate of return is $10/$100 = 0.10 or 10 percent.

A the Beginning of 2012,you Pay $100 for a Share