Math Problem Statement

Suppose a stock had an initial price of $66 per share, paid a dividend of $1.70 per share during the year, and had an ending share price of $78.   Compute the percentage total return. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Solution

The formula for calculating the percentage total return on a stock is:

Total Return=Ending PriceBeginning Price+DividendBeginning Price×100\text{Total Return} = \frac{\text{Ending Price} - \text{Beginning Price} + \text{Dividend}}{\text{Beginning Price}} \times 100

Step 1: Substitute the given values into the formula:

  • Beginning Price = $66
  • Ending Price = $78
  • Dividend = $1.70

Total Return=7866+1.7066×100\text{Total Return} = \frac{78 - 66 + 1.70}{66} \times 100

Step 2: Perform the calculation:

Total Return=12+1.7066×100=13.7066×100\text{Total Return} = \frac{12 + 1.70}{66} \times 100 = \frac{13.70}{66} \times 100

Total Return=0.2076×100=20.76%\text{Total Return} = 0.2076 \times 100 = 20.76\%

Final Answer:

The percentage total return is 20.76%.

Let me know if you'd like further details, or if you have any other questions!

Related Questions:

  1. How do dividends affect total return in stock investments?
  2. What is the difference between price return and total return?
  3. How do you calculate annualized return?
  4. What is the impact of capital gains on total return?
  5. How does inflation affect the real return on a stock?

Tip: When calculating returns over multiple periods, consider using the compound annual growth rate (CAGR) for a more accurate picture of long-term performance.

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Math Problem Analysis

Mathematical Concepts

Percentage Calculations
Financial Mathematics
Total Return

Formulas

Total Return = ((Ending Price - Beginning Price + Dividend) / Beginning Price) * 100

Theorems

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Suitable Grade Level

Grades 10-12