Question

A stock that sold for $24 per share at the beginning of the year was selling for $34 per share at the end of six months when the company paid a dividend of $0.75 per share. What is the simple interest rate on this investment with one share of stock

Answer 1

Rate of return is 45%

Step-by-step explanation:

Rate of return is the percentage of total return earned on the share to its initial price whether in the form of dividend or in the form of capital appreciation.

Dividend Received = $0.75

Price appreciation = $34 - $24 = $10

Total return = $10 + $0.75 = $10.75

Rate of return = ( $10.75 / $24 ) x 100 = 44.79%

Rate of return = 45% ( rounded off to nearest whole number )