Question

You bought a share of Bavarian Sausage stock for $46.50 at the beginning of the year. During the year the stock paid a $2.75 dividend and at the end of the year it trades at $52.75. What is the total return of your stock investment? (Show your work. Label %. Two decimal places required. Highlight or bold your answer.) What is the total dollar return on your investment?

Answer 1

0.1935; 9

Step-by-step explanation:

(a) Total return of your stock investment:

= (Trading value of stock at the year end + Dividend paid - Cost of purchasing the stock) ÷ Cost of purchasing the stock

= (52.75 + 2.75 - 46.5) ÷ 46.5

= 0.1935

(b) Total dollar return on your investment:

= Trading value of stock at the year end + Dividend paid - Cost of purchasing the stock

= 52.75 + 2.75 - 46.50

= 9