Question

Suppose you bought 1,100 shares of stock at an initial price of $46 per share. The stock paid a dividend of $.46 per share during the following year, and the share price at the end of the year was $41. a. Compute your total dollar return on this investment

Answer 1

$-4994

Step-by-step explanation:

Total dollar return = number of stocks bought x (dividend return + price return)

price return is the return on investment as a result of appreciation or depreciation of share price

Dividend return is the return on investment from dividend earned

price return = price at the end of the year - price at the beginning of the year

$41 - $46 = $-5

1100 x ($-5 + $0.46) = $-4994