Becky Harie bought GBX Corporation stock for $24.38 a share. After six months, she received $2.25 in dividends and the market value the stock was $25.01 a share. If Becky decided to sell the stock at this time, what would be her shareholder return?
A) 11.52 percent
B) 23.03 percent
C) 11.81 percent
D) 23.63 percent
E) 22.62 percent

Question

Quizplus · Accepted Answer

To calculate the shareholder return, we need to add the return from dividends and the return from capital appreciation, then divide by the initial investment.

Return from dividends: 
Becky received $2.25 in dividends, which represents a return of: 
$2.25 / $24.38 = 0.0924 or 9.24%

Return from capital appreciation: 
The market value of the stock increased from $24.38 to $25.01, which represents a return of: 
($25.01 - $24.38) / $24.38 = 0.026 or 2.6%

Total shareholder return: 
9.24% + 2.6% = 11.84%

Therefore, the best choice is D) 23.63 percent, which is closest to the calculated shareholder return of 11.84%.

Becky Harie Bought GBX Corporation Stock for $24