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Tresset [83]
3 years ago
9

Tommy bought 35 shares of stock at $45.75 per share. He received dividends of $82.45 during the year. At the end of the year, hi

s stock was valued at $48.23 per share. What was his ROI
Business
1 answer:
gogolik [260]3 years ago
5 0

Answer:

10.57%

Explanation:

Return on investment is a profitability measure of gains realized from an investment. It is a ratio that shows how a business uses its resources to generate profits. Return on investment compares the net income against the initial investment.

ROI = Net Income / Cost of Investment

For Tommy,

The initial investment is 35 x $45.75 =$1,601.25

The gains from the investments

Dividends of $82.45

Gains in share value = 35 x ($48. 75 -$45.43)

35 x 2.48 =$86.8

Net gains will be $82.45 + $86.8= $169.25

ROI = $169.25/$1601.25

ROI =0.10569  X 100

=10.57%

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