Investment Return Rx Corp stock was $60.00 per share at the end of last year. Since then, it paid a $1.00 per share dividend last year. The stock price is currently $62.50. If you owned 400 shares of Rx, what was your percent return?
A) 1.67%
B) 4.17%
C) 5.60%
D) 5.83%

Question

Quizplus · Accepted Answer

First, we need to calculate the total value of the investment at the end of the year, which would be:
400 shares x $60.00 = $24,000

Then, we need to add the dividend received:
400 shares x $1.00 = $400

Total value at the end of the year would be:
$24,000 + $400 = $24,400

Now, we can calculate the current value of the investment:
400 shares x $62.50 = $25,000

The total return would be the difference between the current value and the initial value, plus any dividends received, divided by the initial value:
($25,000 - $24,400 + $400) / $24,000 = 0.0583 or 5.83%

Therefore, the answer is D.

Investment Return Rx Corp Stock Was $60