Question

At the start of a year, company XYZ's stock is $40 per share. At the end, the company's stock is $60 per share. What was the stock price's rate of return (percent increase)?

Answer 1

We have been given that at the start of a year, company XYZ's stock is $40 per share. At the end, the company's stock is $60 per share. We are asked to find the percent increase.

We will use percent increase formula to solve our given problem.

$\text{Percent increase}=\frac{\text{Final}-\text{Initial}}{\text{Initial}}\times 100\%$

$\text{Percent increase}=\frac{60-40}{40}\times 100\%$

$\text{Percent increase}=\frac{20}{40}\times 100\%$

$\text{Percent increase}=0.5\times 100\%$

$\text{Percent increase}=50\%$

Therefore, the stock price's rate of return was 50%.