Question

At the beginning of the year, you purchased a share of stock for $37.50. Over the...

At the beginning of the year, you purchased a share of stock for $37.50. Over the year the dividends paid on the stock were $2.75 per share.

a. Calculate the return if the price of the stock at the end of the year is $30.
b. Calculate the return if the price of the stock at the end of the year is $40.

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Homework Answers

Answer #1

Formula:

Where,
R = Return on stock
P1 = Price of stock at the end of the year
P0 = Purchase price of the stock
D = Dividend paid

a) When the price at the year-end is $30.

b) When the price at the year-end is $40.

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