Answered

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One year ago, you purchased 200 shares of Southern Foods common stock for $7900. Today, you sold your shares for $35.40 a share. During this past year, the stock paid $1.25 in dividends per share. What is your percent return on this investment

Sagot :

Shahzaibfaraz

Answer:

Return on investment = -0.07215 or -7.215%

Explanation:

The rate of return or percent return on the investment can be calculated by deducting the initial cost of the investment from the current value of the investment and dividing it by the initial cost.

The return provided by the investment can be calculated by adding the returns provided in form of dividend and capital gains both. Thus, the return can be calculated as follows,

Total dividend = 1.25 * 200 = $250

Total selling value = 35.4 * 200 = $7080

Total value = 250 + 7080 = $7330

Return on investment = (7330 - 7900) / 7900  =  -0.07215 or -7.215%

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