Imagine you bought 100 shares of stock in XYZ, Inc. today at $1 each, and sold all 100 shares for $1.50 each a year later. You also earned $25 in dividends over the period, and paid $5 to make the trade. What is your Return on Investment (ROI) ?

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Business

Lorelai Horn

8 January, 16:49

Imagine you bought 100 shares of stock in XYZ, Inc. today at $1 each, and sold all 100 shares for $1.50 each a year later. You also earned $25 in dividends over the period, and paid $5 to make the trade. What is your Return on Investment (ROI) ?

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Answers (2)

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Alison Valencia · Answer 1

Answer: you win $70 in this transaction.

Explanation: Initially you bought 100 shares at $1 each, so as for now, we have the total amount of 100*-$1 = - $100.

After, you sell all of them by $1.5 each, so now you have:

100*$1.5 = $150

Here you also win $25, and paid $5, so you lose $5.

Now, the things you paid are the initial $100 and the $5, so the total amount that you lose is $105.

The amount that you win is $150 and $25, a total of $175.

The difference is:

Profit = $175 - $105 = $70

So you win $70 in this transaction.

Doyle · Answer 2

ROI = Net Profit / Total Investment * 100

Calculation of net profit = ($1.50 - $1 * 100 shares + $25) less expenses $5 = $70

ROI = [$70 / 100 * $1] * 100

= 70%