Question

Clive Stone had 500 shares of Quality Fund on January 1. The shares had a value...

Clive Stone had 500 shares of Quality Fund on January 1. The shares had a value of $25.35. During the year he received $459 in dividends and $641 in capital gains distributions. Jonathan used the funds to purchase new shares at an average price of $22 per share. By the end of the year the shares went up to $31.86 per share. What is his percentage rate of return?

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Answer #1

Opening number of shares = 500

Initial investment = 500*25.35 = $ 12675

Amount recived as dividen and capital gain = 459 + 641 = $ 1100

Number of additional shares invested = amount / price per share = 1100/22 = 50 shares

Total shares at th end of year = 500+50 = 550 share

amount of investment at the end = 550*31.86 = $17523

Return for the year =( amount at the year end - investment amount )/ Investment = return / investment =

= (17523-12675)/12675 = 4848/12675 = 0.38248 = 38.248%

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