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14 March, 06:52

Francis purchased a stock one year ago for $20, and it is now worth $24. The stock paid a dividend of $3 during the year. What was the stock's rate of return from capital appreciation during the year

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  1. 14 March, 08:06
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    The correct answer is 20%.

    Explanation:

    According to the scenario, the given data are as follows:

    Stock price one year ago = $20

    Current stock price = $24

    Dividend paid = $3

    So, we can calculate the rate of return from capital appreciation by using following formula:

    RR from capital appreciation = Capital Appreciation : Start Price

    Where Capital Appreciation = $24 - $20 = $4

    So, by putting the value we get,

    RR from capital appreciation = $4 : $20

    = 0.2 or 20%
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Home » Business » Francis purchased a stock one year ago for $20, and it is now worth $24. The stock paid a dividend of $3 during the year. What was the stock's rate of return from capital appreciation during the year
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