We have following information -
Spartan Sofas, Inc. is selling for $50.00 per share today
Spartan will be selling for $48.00 per share in one year
The dividend for the year will be $3.00
Therefore dollar return on Spartan for one year = selling price per share in one year + dividend in one year - selling price per share today
= $48 + $3 - $50
=$51 -$50
= $1
Percentage return on Spartan for one year = {(selling price per share in one year + dividend in one year - selling price per share today)/ selling price per share today} *100
= {($48 + $3 -$50)/$50} *100
= {$1/$50} *100
= 0.02 * 100
= 2%
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