Question

At the beginning of the year, your neighbor bought 250 shares of Nu-Tek Corporation and paid $104.32 per share. The share price at the end of the year was $193.65. During the year, your neighbor received a dividend payment from Nu-Tek of $2.34 per share. What was your neighbor's dollar return on this investment? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer 1

Return on investment= 87.87 %

Step-by-step explanation:

Dollar return on investment is the sum of the capital gains and the dividend received all expressed as a percentage of the cost of the investment.

Total cost = 250×104.32=26,080

Total capital gain = (193.65- 104.32)× 250 = 22,332.5

Dividend = $2.34 per share×250 = 585

Dollar return on Investment = (585 +22,332.5) /26080 × 100

= 87.87 %