190k views
0 votes
What is the total percentage return for an investor who purchased a stock for $ 5.28 , received $2.09 in dividend payments, and sold the stock for $ 7.45 ?

User NeoWang
by
7.1k points

1 Answer

6 votes

Final answer:

The total percentage return on the investment is 80.68%, which is calculated by combining the capital gains and dividend payments relative to the original investment and converting the result to a percentage.

Step-by-step explanation:

The total percentage return for an investor who purchased a stock for $5.28, received $2.09 in dividend payments, and sold the stock for $7.45 can be calculated by adding the dividend payments to the capital gains, then dividing by the original purchase price, and finally, multiplying by 100 to convert to a percentage. First, determine the capital gain: $7.45 (selling price) - $5.28 (purchase price) = $2.17 in capital gains. Next, add the dividend payments received: $2.17 (capital gains) + $2.09 (dividends) = $4.26 total return.

Now, divide the total return by the original investment and multiply by 100: ($4.26 total return / $5.28 original investment) * 100 = 80.68% total percentage return.

User Kevin Van Ryckegem
by
7.8k points