The dollar value of a company's stock rose from $20 to $21 during a year.If the stock paid a dividend of $3, the return on the stock was

Question

​The dollar value of a company's stock rose from $20 to $21 during a year.If the stock paid a dividend of $3, the return on the stock was

Quizplus · Accepted Answer

The return on the stock is calculated by adding the dividend to the change in stock price, then dividing by the initial stock price. Here, the change in stock price is $1 ($21 - $20), and the dividend is $3. So, the return is ($1 + $3) / $20 = $4 / $20 = 0.20 or 20 percent.

​The Dollar Value of a Company's Stock Rose from $20

The Dollar Value of a Company's Stock Rose from $20