Last year Mike bought 100 shares of Dallas Corporation common stock for $53 per share. Duringthe year he received dividends of $1.45 per share. The stock is currently selling for $60 per share.What rate of return did Mike earn over the year?
A) 14.1 percent
B) 13.2 percent
C) 15.9 percent
D) 11.7 percent

Question

Quizplus · Accepted Answer

Mike's initial investment was $53 x 100 = $5,300.
He received dividends of $1.45 x 100 = $145.
The current value of his investment is $60 x 100 = $6,000.
His total return is $145 + ($6,000 - $5,300) = $845.
His rate of return is ($845/$5,300) x 100% = 15.9%. Therefore, the correct answer is C.

Last Year Mike Bought 100 Shares of Dallas Corporation Common