If an $80 stock pays a quarterly dividend of $1 what is the implied annual rate of return

Question

Elliott Miranda

Business

14 November, 21:49

If an $80 stock pays a quarterly dividend of $1 what is the implied annual rate of return

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Answers (1)

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Makhi Barr · Answer 1

An annual rate of return is the amount of loss or gain made through an investment in a yaear based on the percentage of intial investment.

In this case, since the quarterly divident is $1, in one year it would be:

$1 x 4 = $4

So, the annual rate of return would be $4 / $80 x 100% = 2%