Question

Suppose you bought 400 shares of stock at an initial price of $53 per share. The stock paid a dividend of $0.58 per share during the following year, and the share price at the end of the year was $54. Compute your total dollar return on this investment.Total dollar return= ___.

Answer 1

Gain per share = $1.58

Total dollar return on investment = $632

Step-by-step explanation:

In order to calculate the total dollar return on investment we will first calculate the dollar return on one share and then multiply it by the total number of shares.

Share was bought at the initial price of 53 and it paid a dividend of 0.58 and sold for 54. Gain = Selling Price-Buying Price + Dividend.

Gain per share = 54-53+0.58=1.58

Total dollar return= 1.58*400=$632