Question

Eight months ago, you purchased 400 shares of Winston stock at a price of $46.40 a share. The company pays quarterly difidents of $1.05 a share. Today, you sold all of your shares for $48.30 a share. What is your total percentage return on this investment

Answer 1

The total percentage return on this investment is 8.62%

Step-by-step explanation:

Given the initial investment is 400 shares * 46.40 = $18,560 and the purchase of those shares were "eight month ago"

The company pays quarterly dividends of $1/05 per share. So, that in between 8 month, these are 2 Quarters

Thus Dividend amount= 400 * 1.05 * 2 Quarters= $840

Capital gains= Sales value - Purchase price

= 400 * 48.30 - 18,560

= 19,320 - 18,560

= $760

Therefore total percentage return on this investment will be derived by (Dividend + Capital) / Initial Investment * 100

= (840 + 760)/18560 * 100

= 8.62%

Answer 2

Percentage return on investment= 8.62 %

Step-by-step explanation:

Return on investment is the amount that an investor gains after investing in a particular business venture. Percentage return on investment is calculated as gain from a business venture divided by the initial investment.

Percentage return on investment= (Gain ÷ Initial investment) * 100

Gain on share price= 48.30 - 46.40 = $1.90

Gain from dividend= 2 * 1.05= $2.10

Total gain = 1.90 + 2.10 = $4

Therefore

Percentage return on investment= (4 ÷ 46.40) * 100

Percentage return on investment= 8.62 %

So the gain on initial investment of the 400 shares is 8.62%