Question

You bought a stock at $28 last year. After one year, you received a dividend of $0.37 and then sold the stock for $34. What was your rate of return on this investment? a. 17.24% b. 22.75% c. 21.61% d. 21.43% e. 18.74%

Answer 1

To calculate the rate of return on the investment, use the formula (Ending Value - Initial Value + Dividends) / Initial Value. In this case, the rate of return is 1.32%.

Step-by-step explanation:

The rate of return on this investment can be calculated using the formula:

Rate of Return = (Ending Value - Initial Value + Dividends) / Initial Value

Plugging in the values from the question, we get:

Rate of Return = (34 - 28 + 0.37) / 28 = 0.37 / 28 = 0.0132

Converting the decimal to a percentage, we get a rate of return of 1.32%. Therefore, the correct answer is not listed.