Wht is the percentage earned on the investment?

an investor bought 100 shares of Copier Corp. for $85 a share. the firm pays an annual dividend of $4 a share. commission were $75 to purchase and $75 to sell. the price of the stock rose to $120 and the investor sold.

Okay, assuming you held for one year - as to guarantee receipt of the full dividend ($4/sh on an annual basis):

Bought:
[100 shares] x [$85 / share] = $8,500 shareholder buy value

Sold:
[100 shares] x [$120 / share] = $12,000 shareholder sale value

Dividend:
[100 shares] x [$4 / share] = $400 dividend payment (assuming one year hold)

Commission costs:
[$75 to buy] + [$75 to sell] = $150

Now, just add (sale value, dividend) or subtract (buy value, commision costs) as logical to get your final gain:

-$8,500 + $12,000 + $400 - $150 = $3,750

So, at the end of the day (err, one year!) this whole process earned you $3,750 after all expenses (excluding taxes).

For your most basic calculation of earnings, just add up the "costs" to you out of your pocket ($8,500 + $150 = $8,650) and divide your end gain into it:

[$3,750 / $8,650] x 100% = 43.4%

This last step is open to debate I suppose, but that's the most basic way to look at it (the total gain to you divided by the money that it cost you to invest).

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