Question

One year ago, you bought a share for $9.76. Unfortunately, the share did not pay you any dividends during that year. The share price is now $10.68. What is the return you received on this share? (as a percentage to the nearest two decimal points. don’t use % sign. eg 2.881% is 2.88)

Answer 1

Solution :

The return received on a share is calculated using the following formula :

= ( Current market price – Purchase price ) / Purchase price

As per the information given in the question we have

Current market price = $ 10.68 ; Purchase price = $ 9.76 ;

Applying the above values in the formula we have the return received on the share as

= ( $ 10.68 - $ 9.76 ) / $ 9.76

= $ 0.92 / $ 9.76

= 0.094262

= 9.4262 %

= 9.43 % ( when rounded off to two decimal places )

Thus the return received on the share = 9.43