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16 April, 11:08

Corporations often distribute profits to their shareholders in the form of dividends, which are simply checks mailed out to shareholders. Suppose that you have the chance to buy a share in a fashion company called Rogue Designs for $35 and that the company will pay dividends of $2 per year on that share every year. What is the annual percentage rate of return?

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  1. 16 April, 11:20
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    5.71%

    Explanation:

    Corporations annual percentage rate of return

    Dividends of $2 per year : Designs for $35

    =0.0571

    =0.0571*100

    =5.71%

    Therefore a yearly dividend of $2 on a $35 share of stock equals a 5.71% annual rate of return
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