Ask Question
7 June, 21:27

Shelby purchased 100 shares of ABCD Growth fund for $10.00 per share. She had income dividends of $15, capital gain distributions of $35, and a capital gain of $120 in the year she sold her shares. What was her percentage of total return on this investment?

+5
Answers (2)
  1. 7 June, 21:39
    0
    17%

    Explanation:

    Let's begin by writing out the parameters given in the question. We have:

    n = 100 shares, r = $ 10 / share

    => Cost of investment = $1,000,

    income dividends = $15,

    capital gain distributions = $35,

    capital gain = $120

    Total return on investment is an economic parameter used to measure how profitable an investment is. It measures the total income realized (dividends, interest as well as the closing sale price) from the investment & compares it against the total amount of capital that was initially invested. To calculate the total return on investment (ROI), we use the formula:

    Rate of return = 100% * (income realized) : (original value)

    ROI = 100% * (income dividends + capital gain distributions + capital gain) : capital invested

    ROI = 100% * (15 + 35 + 120) : 1000

    ROI = 100% * (170 : 1000)

    ROI = 17%

    Shelby's total return on this investment is 17%
  2. 7 June, 21:50
    0
    Percentage of total return on Investment = ROI = 17%

    Explanation:

    Let's

    ROI = Return on Investment = ?

    D = Dividends = $15

    CGD = Capital Gain Distributions = $35

    CGS = Capital Gain on Sale = $120

    SP = Shares Purchased = 100

    CS = Cost per share = $10.00

    ROI = (D + CGD + CGS) / (SP * CS)

    ROI = ($15 + $35 + $120) / (100 * $10.00)

    ROI = 170 / 1,000

    ROI = 0.17

    Percentage: 0.170 x 100%

    ROI = 17%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Shelby purchased 100 shares of ABCD Growth fund for $10.00 per share. She had income dividends of $15, capital gain distributions of $35, ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers