Question

$60 one year ago. The stock is now worth $70. During the year, the stock paid a dividend of $2.25. What is the total return to George from owning the stock? (Round your answer to the nearest whole percent.)?

Answer 1

$60 one year ago. The stock is now worth $70. During the year, the stock paid a dividend of $2.25. The total return to George from owning the stock would be 20% (after rounding off the answer to the nearest whole percent).

• Total return on share is the summation of dividend and price appreciation.
• Since, the dividend = $2.25
• Then, to ascertain price appreciation we need to subtract the dividend from the total return on the share.
• Price appreciation = $70 - $60 = $10
• Total return can be calculated hence.
• Total return = $10 + $2.25 = $12.25
• Therefore, the total return for George was $12.25.
• To round off the answer to the nearest whole percentage:
• Total return percent = $12.25/$60 = 20% approximately

Therefore, the total return to George from owning the stock would be 20%.

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