At the beginning of the year, your neighbor bought 250 shares of Nu-Tek Corporation and paid $104.32 per share. The share price at the end of the year was $193.65. During the year, your neighbor received a dividend payment from Nu-Tek of $2.34 per share. What was your neighbor's dollar return on this investment? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

Question

Business

Tony Boone

1 April, 16:40

At the beginning of the year, your neighbor bought 250 shares of Nu-Tek Corporation and paid $104.32 per share. The share price at the end of the year was $193.65. During the year, your neighbor received a dividend payment from Nu-Tek of $2.34 per share. What was your neighbor's dollar return on this investment? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

+4

Answers (1)

Know the Answer?

Cristofer Lee · Answer 1

Return on investment = 87.87 %

Explanation:

Dollar return on investment is the sum of the capital gains and the dividend received all expressed as a percentage of the cost of the investment.

Total cost = 250*104.32=26,080

Total capital gain = (193.65 - 104.32) * 250 = 22,332.5

Dividend = $2.34 per share*250 = 585

Dollar return on Investment = (585 + 22,332.5) / 26080 * 100

= 87.87 %