Asked by Andrea Cannon on May 11, 2024
Verified
Marti purchased a stock one year ago at a price of $23.89. Over the past year she has received a total of $1.63 in dividends. Today she sold the stock for $22.84. What percentage total return did Marti earn on this investment?
A) 2.43%
B) 2.54%
C) 4.40%
D) 6.82%
E) 7.14%
Percentage Total Return
A measure of the performance of an investment, calculated by dividing the investment's profit by its initial cost.
Dividends
Payments made by a corporation to its shareholder members, usually derived from profits.
- Master the process of calculating and making sense of the total percentage return from investments.
Verified Answer
AB
Alessia BerardescaMay 12, 2024
Final Answer :
A
Explanation :
The total return is calculated by adding the dividends received to the gain (or loss) on the stock and then dividing by the purchase price. Marti's total return = (($22.84 - $23.89) + $1.63) / $23.89 = ($-1.05 + $1.63) / $23.89 = $0.58 / $23.89 = 0.0243 or 2.43%.
Learning Objectives
- Master the process of calculating and making sense of the total percentage return from investments.