Question

Two years ago Daniel bought 40 shares of Ford Motor Company (F) for $70 a share. The stock pays an annual dividend of $1.50. Daniel is going to sell his stock at the current market market price of $120 per share. What would his Total Return be?​

Answer 1

Answer:

75.71%

Explanation:

Total return is a measure of all the returns that investment makes, be it interest, dividend income, capital gain, or other forms.

Total return is called using the format below.

(The asset’s value at the end  – the value at the beginning year) + dividends/value of the investment at the beginning = the total return.

For Daniel, total return would be

=($120x 40)- ($70 x 40) + ($1.50 x 40 x 2)

  ($70 x 40)

=$4,800 - $2,800 + $120

 $2,800

=$2,120/$2,800

=0.75714 x 100

=75.71%