A stock that went from $40 per share at the beginning of the year to $45 at the end of the year and paid a $2 dividend provided an investor with a ____ return.
A) 8.75%
B) 14%
C) 17.5%
D) 7%

Question

Quizplus · Accepted Answer

To calculate the total return, we need to include both capital gains and dividend income. The capital gain is ($45 - $40) / $40 = 12.5%. The dividend yield is $2 / $40 = 5%. So the total return is 12.5% + 5% = 17.5%. Therefore, the best choice is C.

A Stock That Went from $40 Per Share at the Beginning