An investor purchase 100?

An investor purchase 100 shares of stock for $70,received an annual dividend of $0.60 per share and sold the stock for $80 per share after one year.what is the total return on investment?

I assume you mean the stock was purchased for $70 per share.

Total Investment: 100 x $70 = $7,000
Ending Value: (100 x $80) + (100 x $.60) = $8,060

$8,060 / $7,000 = 1.1514

Therefore, your total return on investment is 15.14%.

Too easy! $10/share on the buy/sell + 60 cents per share dividend = $10.60 X100 shares = $106 return or $106 return on $7000 invensment = 1.5% annual return.

Well.. the simple math is this: Cost is $70(ps) * 100(#s) = $7,000. Receiving $0.60(ps) dividend will create an 'income of' of $60. Selling the stock at $80(ps) will create a 'cash out' cost of $8,000. Adding the 'income' from the dividend to the 'cash out' value of $800 gives you a total of $8,060 and subtract from the cost of $7,000 and you have 'profit' of $1,060.

That's the simplistic calculation. If you factor in that each trade (buy and sell) will come with a comission fee which is about $10 per trade on average at discount brokerage the full cost to trade is $20 thus the profit would actually be $1,040.

Hope this answers the question!

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