Asked by Marisol Trejo on May 06, 2024

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One year ago, you purchased 600 shares of Westover Paints stock at a price of $3.68 per share. The stock pays an annual dividend of $.02 per share. Today, you sold all of your shares for $11.21 per share. What is your total dollar return on this investment?

A) $4,518
B) $4,530
C) $4,542
D) $4,575
E) $5,120

Annual Dividend

The total dividend payment a shareholder receives from a company or investment fund in one year.

Total Dollar Return

The overall financial benefit received from an investment, considering both capital gains and income such as dividends or interest.

Shares

Units of ownership interest in a corporation or financial asset that provides for an equal distribution in any profits, if any are declared, in the form of dividends.

  • Gain an understanding of and calculate the cumulative return from investments.
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DM
Dulce Maria CamposMay 12, 2024
Final Answer :
B
Explanation :
The total dollar return on the investment includes both the capital gains (or losses) and the dividends received. The capital gain per share is the selling price minus the purchase price, which is $11.21 - $3.68 = $7.53. For 600 shares, the total capital gain is 600 * $7.53 = $4,518. The total dividend income is the dividend per share times the number of shares, which is $0.02 * 600 = $12. Therefore, the total dollar return is the sum of the capital gain and the dividend income, which is $4,518 + $12 = $4,530.