Question

Jill purchased a share for $8.26 one year ago. The share is now worth $16.96. During the year, the share paid a dividend of $0.53.

What is the total return to Jill from owning the share? (as a percentage to the nearest two decimal points; don’t use % sign. eg 2.881% is 2.88.)

Answer 1

Solution:

Price of share at the beginning = $8.26

Price of share at the end = $16.96

Dividend paid during the year = $0.53

Therefore, total return to Jill from the share = [(Price of the share at the end - Price of Share at the beginning) + Dividend paid] / Price of share at the beginning

Return = [(16.96 - 8.26) + 0.53] / 8.26

Return = 1.12

Answer: The return to Jill from the stock is 1.12.