Question

In: Finance

An investor buys some shares of ABC for $20 at the beginning of the year. During...

An investor buys some shares of ABC for $20 at the beginning of the year. During the year he receives $0.50 in dividends, and then sells the shares for $21 at the end of the year. What is the total return on this investment?

Solutions

Expert Solution

Total return on investment=(Selling price + Dividend -Buying price)/ buying price)*100

= ((21+.5-20)/20)*100

= (1.5/20)*100

= 7.5%

Overall return which has been made by investor is 7.5 %.

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

An investor buys 50 shares of BOA at $22.6 per share at the beginning of 2017,...
An investor buys 50 shares of BOA at $22.6 per share at the beginning of 2017, buys another 80 shares at $29.75 per share at the beginning of 2018, sells 30 shares at $24.08 per share at the beginning of 2019, and sells all 100 remaining shares at $35.35 per share at the beginning of 2020. BOA pays $0.39 per share of dividends at the end of 2017, pays $0.54 per share of dividends at the end of 2018, and...
An investor buys three shares of XYZ at the beginning of 2002 for $100 apiece. After...
An investor buys three shares of XYZ at the beginning of 2002 for $100 apiece. After one year, the share price has increased to $110 and he receives a dividend per share of $4. Right after receiving the dividend, he buys two additional shares at $110. After another year, the share price has dropped to $90, but the investor still receives a dividend per share of $4. Right after receiving the dividend, he sells one share at $90. After another...
1. An investor buys a 20-year semiannual bond with a coupon rate of 5% for $950....
1. An investor buys a 20-year semiannual bond with a coupon rate of 5% for $950. He plans to hold the bond for 8 years and then sell it. The investor expects to reinvest the first 6 coupon payments at 4.5% and the next 10 payments at 5.5%. He also expects that the bond’s YTM at the end of the holding period to be 6%. Under these assumptions, the total interest amount is A. $420.63 B. $450.85 C. $474.51 D....
An investor buys 1,000 shares of Tundra Enterprises, Inc. at $45 1/2 per share. A year...
An investor buys 1,000 shares of Tundra Enterprises, Inc. at $45 1/2 per share. A year later, he sells his entire position at $53 1/4. The firm paid a dividend of $0.75 per share during this period. Based on this information, calculate the investor's realized return
An investor buys 1 share of ABC Ltd at the price of $32 on December 1,...
An investor buys 1 share of ABC Ltd at the price of $32 on December 1, 2019. The firm is not expected to pay any dividends. Consider the following three possible scenarios for the share price on December 1, 2020: $50 with a probability of 30% $35 with a probability of 60% $23 with a probability of 10% b) Calculate the expected return for holding the share for a year. (2 mark) c) Calculate the variance of return and standard...
An investor buys 1 share of ABC Ltd at the price of $32 on December 1,...
An investor buys 1 share of ABC Ltd at the price of $32 on December 1, 2019. The firm is not expected to pay any dividends. Consider the following three possible scenarios for the share price on December 1, 2020: $50 with a probability of 30% $35 with a probability of 60% $23 with a probability of 10% b) Calculate the expected return for holding the share for a year. (2 mark) c) Calculate the variance of return and standard...
An investor buys 1 share of ABC Ltd at the price of $32 on December 1,...
An investor buys 1 share of ABC Ltd at the price of $32 on December 1, 2019. The firm is not expected to pay any dividends. Consider the following three possible scenarios for the share price on December 1, 2020: $50 with a probability of 20% $34 with a probability of 50% $27 with a probability of 15% $20 with a probability of 15% a) Calculate the expected return for holding the share for a year. b) Calculate the variance...
An investor buys 1 share of ABC Ltd at the price of $32 on December 1,...
An investor buys 1 share of ABC Ltd at the price of $32 on December 1, 2019. The firm is not expected to pay any dividends. Consider the following three possible scenarios for the share price on December 1, 2020: $50 with a probability of 20% $34 with a probability of 50% $27 with a probability of 15% $20 with a probability of 15% a) Calculate the expected return for holding the share for a year. b) Calculate the variance...
An investor buys 1 share of ABC Ltd at the price of $32 on December 1,...
An investor buys 1 share of ABC Ltd at the price of $32 on December 1, 2019. The firm is not expected to pay any dividends. Consider the following three possible scenarios for the share price on December 1, 2020: $50 with a probability of 20% $34 with a probability of 50% $27 with a probability of 15% $20 with a probability of 15% a) Calculate the expected return for holding the share for a year. b) Calculate the variance...
Investor buys 200 shares of stock at $27.25 per share. Investor sells the stock after one...
Investor buys 200 shares of stock at $27.25 per share. Investor sells the stock after one year. 1. What is the dollar amount of gain and the percent of return if the stock is sold for $32.60 per share? How much does the yield percentage increase to if the stock received a per share dividend of $1.15 during the year? 2. What is the dollar amount of loss and percentage of return if the stock received a per share dividend...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT