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%
E)none of the above

Question

Quizplus · Accepted Answer

To calculate the return on investment, we use the formula:

Total return = (End Price - Start Price + Dividend) / Start Price

Plugging in the values given, we get:

Total return = (45 - 40 + 2) / 40 
Total return = 7/40

To convert this into a percentage, we multiply by 100:

Total return = 17.5%

Therefore, the correct answer is (C) 17.5%.

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