Determine the investor’s return if current stock price is $20 and $2.5 in dividends have continuously...

Question

Question

Determine the investor’s return if current stock price is $20 and $2.5 in dividends have continuously been paid.

Answer 1

Answer #1

SOLUTION :

THE VALUES PROVIDED IN THE QUESTION ARE AS FOLLOWS:

CURRENT STOCK PRICE = $20

DIVIDEND PAID =$ 2.5

INVESTOR’S RETURN =?

The formula to calculate the Investor’s Return is as follows:

INVESTOR’S RETURN = DIVIDEND PAID / CURRENT STOCK PRICE

INVESTOR’S RETURN =$2.5/ $20

INVESTOR’S RETURN =0.125 or 12.5%

Hence,the investor's return is 12.5 %

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Answer 2

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