What is the investor's total return for the…

What is the investor's total return for the year on the shares, as a percentage?

Question 46

MediumOriginal question

An investor buys 50 shares at ₹240 each. During the year the company pays a dividend of ₹6 a share, and at the end of the year the investor sells all 50 shares at ₹252 each.

What is the investor's total return for the year on the shares, as a percentage?

2.5%Correct answerYour answer5%Correct answerYour answer7.14%Correct answerYour answer7.5%Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer D

Correct answer: D

The investor paid $50 \times 240 = 12{,}000$ and gained $300 + 600 = 900$ .
$\frac{900}{12{,}000} \times 100 = 7.5\%$ .

Worth noting

5% counts only the capital gain, leaving out the dividends.

Concept: Total return: dividend plus capital gain
Typical timeTypical: 120 s
Your timeYours: —

The rule this testsRate of return and CAGR

Practise this chapter →

Ten questions from EMI, CAGR & Depreciation, at your own pace.

Practise this chapter →

Ten questions from EMI, CAGR & Depreciation, at your own pace.

What is the investor's total return for the year on the shares, as a percentage?

Question 46

Explanation