Question

Suppose you bought 700 shares of stock at an initial price of $43 per share. The stock paid a dividend of $0.40 per share during the following year, and the share price at the end of the year was $44. Compute your total dollar return on this investment.

Answer 1

Total dollar return = $980

Step-by-step explanation:

Data:

S = Shares of Stock = 700

P0 = Initial Price = $43

D = Dividends = $0.40

P1 = Price at the end of the year = $44

DR = Dollar Return = ?

Equation:

DR = S * (P1 - P0 + D)

Calculation:

DR = 700 * ($44 - $43 + $0.40)

DR = 700 * ($1.40)

DR = $980

The total dollar return on this investment is $980.

Hope this helps!