Question

Jane purchased 100 shares of Acme Consolidated 1 year ago at $93.30 per share. During the year, Acme paid a dividend of $3.92 per share. Currently, the stock is selling for $103.56 per share. What is Jane's realized rate of return for the year from the stock? Answer as a percentage, 2 decimal places (e.g., 12.34% as 12.34).

Answer 1

Jane's purchase value = 100 * 93.30

Jane's purchase value = 9330

Dividend earned = 3.92 * 100

Dividend earned = 392

Realized return = (392 / 9330) * 100

Realized return = 4.20

Jane have not sold shares hence that is unrealized gain, but if he sells share at current selling price of 103.56

Then realized return would be price gain plus dividend

If Jane sells share

Realized return = ((((103.56 - 93.30) + 3.92) * 100) / 9330)*100

Realized return = 15.20