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Suppose you invested $59 in the Ishares Dividend Stock Fund (DVY) a month ago. It paid a
dividend of 0.38 today and then you sold it for $66. What was your return on the investment?
A) 8.76%
B) 13.76%
C) 12.51%
D) 10.01%

Respuesta :

pedrocarratore

Answer:

C) 12.51%

Explanation:

Initial stock price = $59

Selling price = $66

Dividends paid = $0.38

The total return on the investment is the the sum of the dividend yield and the capital  gains yield on the investment:

[tex]R= DY +CGY\\R=\frac{dividends}{initial\ price}+ \frac{final\ price-initial\ price}{initial\ price} \\R=\frac{0.38}{59}+ \frac{66-59}{59}\\R=0.1251 = 12.51\%[/tex]

The return on the investment is 12.51%

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