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8 February, 13:31

You just purchased a share of SPCC for $100. You expect to receive a dividend of $5 in one year. If you expect the price after the dividend is paid to be $110, what total return will you have earned over the year

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  1. 8 February, 13:47
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    15%

    Explanation:

    Data provided in the question

    Ending share price = $110

    Initial price = $100

    Dividend received = $5

    The computation of the total return is shown below:

    = { (Ending share price - initial price) + Dividend} : (Initial price) * 100

    = { ($110 - $100) + $5} : ($100) * 100

    = $15 : $100 * 100

    = 15%

    Basically we use the above formula so that the total return could come
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