Question

Books Brothers stock was priced at $15 per share two years ago. The stock sold for $13 last year and now it sells for $18. What was the total return for owning Books Brothers stock during the most recent year? Assume that no dividends were paid. Round your answer to the nearest percent.

A) 17%
B) 20%
C) 23%
D) 38%

Answer 1

The total return for owning Books Brothers stock during the most recent year is approximately 38%, considering an increase from $13 to $18 per share without dividends.

Step-by-step explanation:

The total return for owning Books Brothers stock during the most recent year can be calculated as follows: The stock price increased from $13 to $18. This change is a $5 increase per share.

To find the return percentage, divide the price increase by the price at the beginning of the year:

$5/$13 ≈ 0.3846 or 38.46%.

Rounding to the nearest percent, the total return is 38%, which is option D.