Question

Suppose you invested $60 in the Ishares Dividend Stock Fund (DVY) a month ago. It paid a dividend of $0.63 today and then you sold it for $65. What was your return on the investment?

Answer 1

Answer:

The return on investment was 9.38%

Explanation:

Data provided in the question:

Amount invested in dividend stock = $60

Dividend received = $0.63

Amount for which dividend was sold = $65

Now,

The total return from the dividend

= (Selling cost + Dividend received ) - Amount invested

= $65 + $0.63 - $60

= $5.63

Therefore,

The return on investment = [ (Total return ) ÷ Amount invested ] × 100%

= $\frac{\ 5.63}{\ 60}$ × 100%

= 9.38%

Hence,

the return on investment was 9.38%