What would be the return on 200 shares of stock purchased on January 1, 2016 for $60 per share and sold on December 31, 2016 at $80 per share? Also assume that the company paid dividends of $2 per share over the year. The prices include all brokerage fees. Round to the nearest whole percent.
A) 37%
B) 25%
C) 33%
D) 40%

Question

Quizplus · Accepted Answer

The return on investment (ROI) can be calculated by adding the capital gain and dividends received, then dividing by the initial investment and multiplying by 100 to get a percentage. Capital gain per share = $80 - $60 = $20. Total capital gain = 200 shares * $20 = $4000. Total dividends = 200 shares * $2 = $400. Total return = $4000 + $400 = $4400. Initial investment = 200 shares * $60 = $12000. ROI = ($4400 / $12000) * 100 = 36.67%, which rounds to 37%.

What Would Be the Return on 200 Shares of Stock