Final answer:
Sam Evans had a rate of return of 27.37% on his investment in McDonald's stock.
Step-by-step explanation:
To calculate the rate of return on an investment, we need to consider the initial investment, the final value of the investment, and any additional income received during the investment period. In this case, Sam Evans purchased McDonald's stock for $1,900 and sold it one year later for $2,300. He also received a dividend of $120. To calculate his rate of return, we can first calculate the total income, which is the sum of the capital gain from selling the stock and the dividend received:
Total Income = Capital Gain + Dividend
Total Income = ($2,300 - $1,900) + $120
Total Income = $400 + $120
Total Income = $520
Next, we can calculate the rate of return by dividing the total income by the initial investment:
Rate of Return = (Total Income / Initial Investment) x 100%
Rate of Return = ($520 / $1,900) x 100%
Rate of Return = 27.37%