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Mekhanik [1.2K]
2 years ago
13

One year ago, you purchased 500 shares of stock for $22 a share. The stock pays $0.32 a share in dividends each year. Today, you

sold your shares for $24.50 a share. What is your total dollar return on this investment?a. $1,250 b. $1,090 c. $1,199 d. $1,164
Business
1 answer:
galben [10]2 years ago
8 0

Answer:

no option is correct

long term capital gains = ($24.50 - $22) x 500 = $1,250

dividend income = $0.32 x 500 = $160

total return = $1,410

Maybe your teacher is asking about long term capital gains only. If that is the case, then option A. $1,250 is correct

Explanation:

total return = ending value - initial value + dividends received = (500 x $24.50) - (500 x $22) + (500 x $0.32) = $12,250 - $11,000 + $160 = $1,410

holding period return = (ending value - initial value + dividends received) / initial value = $1,410 / $11,000 = 0.1282 = 12.82%

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