Question

Books Brothers stock was priced at $15 per share two years ago. The stock sold for $13 last year and now it sells for $18. What was the total return for owning Books Brothers stock during the most recent year? Assume that no dividends were paid and round to the nearest percent.A) 17%B) 20%C) 23%D) 38%

Answer 1

Answer:

D) 38%

Explanation:

The computation of the total return during the most recent year is shown below:

= (Price of stock at the year end 2 - Price of stock at the year end 1) ÷ (Price of stock at the year end 1)

= ($18 - $13) ÷  ($13)

= ($5) ÷  ($13)

= 38.46%

Basically we deduct the price of year end 1 from the price of year 2 and then divide it by price of year end 1 so that the total return could come