An investor buys a stock for $10,000 and earns dividends of $250 during the course of the year.At the end of the year, the stock is worth $9,300.The total return for the year is

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Quizplus · Accepted Answer

The total return is calculated by adding the dividends earned to the change in stock value, then dividing by the initial investment and multiplying by 100 to get a percentage. Here, the change in stock value is $9,300 - $10,000 = -$700. Adding the dividends, the total return is $250 - $700 = -$450. Dividing by the initial investment of $10,000 and multiplying by 100 gives a total return of -4.5%.

An Investor Buys a Stock for $10,000 and Earns Dividends