How do you calculate total return?
A) Divide the yearly dollar amount of dividend income by the investment's current market value.
B) Compare the dividend against current yields from other investments.
C) Subtract the cost of the stock from what you sold it for.
D) Divide the current dividend payment plus capital gain by the original investment.

Question

Quizplus · Accepted Answer

Total return is the investment's overall performance and includes both capital gains and dividend payments. Therefore, to calculate total return, we need to add the current dividend payment and the capital gain (or loss) to the original investment and then divide by the original investment. Option D provides this calculation.

How Do You Calculate Total Return