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22 February, 07:51

On January 1, a shareholder purchased 81 shares of stock in Beta company for $115 per share. On August 20, the company paid an $8 dividend per share. On December 31, the shareholder sold all the shares for $113 per share. What is the overall Economic Rate of Return for this investment?

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Answers (2)
  1. 22 February, 07:57
    0
    5.22%

    Explanation:

    Dividend per share = $8

    Loss on sales per share = Purchase price - Sales price - = $115 - $113 = - $2

    Total return per share = Dividend per share - Loss on sales per share

    = $8 - $2 = $6

    Overall Economic Rate of Return = (Total return per share : purchase price) * 100

    Overall Economic Rate of Return = ($6 : $115) * 100

    = 5.217391304347830

    = 5.22% approximately

    Therefore, the overall Economic Rate of Return for this investment is 5.22%.
  2. 22 February, 08:14
    0
    Economic rate of return on the investment is as follows

    Total Cash Received =

    Dividend = 8

    Share disposal = 113

    Total 121

    Total investment = 115

    Net return on investment = 121-115 = 6

    Net return on investment = 6/115*100 = 5.217%
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Home » Business » On January 1, a shareholder purchased 81 shares of stock in Beta company for $115 per share. On August 20, the company paid an $8 dividend per share. On December 31, the shareholder sold all the shares for $113 per share.
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