Question

Suppose a stock had an initial price of $50 per share, paid a dividend of $.80 per share during the year, and had an ending share price of $38. Compute the percentage total return. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Answer 1

Answer:

25.6%

Explanation:

Computation for the percentage total return

Using this formula

Percentage total return=[(Ending share price-Initial price)+Dividend]/Initial price

Let plug in the formula

Percentage total return=[($38-$50)+$.80)/$50

Percentage total return=$12+$.80/$50

Percentage total return=$12.8/$50

Percentage total return=0.256*100

Percentage total return=25.6%

Therefore the percentage total return will be 25.6%