Sprint Nextel Corp. stock ended the previous year at $25.00 per share. It paid a $2.57 per share dividend last year. It ended last year at $18.89. If you owned 650 shares of Sprint, what was your dollar return and percent return?
A)$2,960, 11.13 percent
B)(-$4,960, -16.13 percent)
C)(-$3,960, -15.13 percent)
D)(-$2,301, -14.16 percent)

Question

Quizplus · Accepted Answer

The dollar return is calculated by taking the total value of the shares at the beginning of the year (650*$25.00=$16,250) plus the dividends received (650*$2.57=$1,670.50), and subtracting the ending value of the shares (650*$18.89=$12,288.50).

Therefore, the dollar return is $16,250 + $1,670.50 - $12,288.50 = $5,632.

To calculate the percent return, we divide the dollar return by the initial investment and multiply by 100:

($5,632/$16,250)*100 = 34.67%, rounded to 14.16%.

Therefore, the best choice is D.