One year ago, Peyton purchased 3,600 shares of Broncos stock for $101,124. Today, he sold those shares for $26.60 a share. What is the total return on this investment if the dividend yield is 1.9 percent?

Question

BlackTom AI · Accepted Answer

Question restatement: One year ago, Peyton purchased 3,600 shares for a total of 101,124. Today, he sold the shares at 26.60 each. The problem asks for the total return on the investment, given a dividend yield of 1.9%. Options to evaluate: -3.98 percent, -2.29 percent, 1.10 percent, -3.40 percent.

Step-by-step analysis of each option:

Option 1: -3.98 percent
- To check this, compute the total return as (ending value + dividends - cost). Ending value from sale = 3,600 × 26.60 = 95,760. Dividends = 1.9% of the initial cost 101,124 ≈ 1,921.36. Total ending value including dividends = 95,760 + 1,921.36 ≈ 97,681.36. Subtract the initial cost 101,124 to get net return ≈ -3,442.64. Divide by the initial cost to get return ≈ -3.41%. This rounds to -3.41%, not -3.98%, so this option is not correct.

Option 2: -2.29 percent
- Using the same math: net return ≈ -3,442.64. Percentage return ≈ (-3,442.64 / 101,124) ≈ -3.41%. This is far from -2.29%, so this option is incorrect.

Option 3: 1.10 percent
- A positive return would require the ending value plus dividends to exceed the cost by about 1.10%. Given the sale value is 95,760 and dividends about 1,921, the total recovered is ≈ 97,681.36, which is still below the initial 101,124 by about 3,442.64. Therefore the return is negative, not positive, making this option incorrect.

Option 4: -3.40 percent
- This matches the calculated return. Net loss ≈ 3,442.64 on an investment of 101,124 yields roughly -3.40%. The calculation steps align with standard total return calculations: total return = (sale proceeds + dividends) − cost, then divide by cost to express as a percentage. The numbers: sale 95,760 + dividends ≈ 1,921.36 = 97,681.36; 97,681.36 − 101,124 ≈ −3,442.64; (−3,442.64 / 101,124) ≈ −0.0340 = −3.40%.

Summary: By performing the total return calculation with sale proceeds, dividends, and initial cost, option 4 yields the correct approximate percentage return of −3.40%. The other options either overstate or reverse the sign of the return based on incorrect arithmetic or misinterpretation of dividends relative to cost.

One year ago, Peyton purchased 3,600 shares of Broncos stock for $101,124. Today, he sold those shares for $26.60 a share. What is the total return on this investment if the dividend yield is 1.9 percent? 单项选择题

类似问题

One year ago, you purchased 500 shares of Best Wings, Inc. stock at a price of $9.60 a share. The company pays an annual dividend of $0.10 per share. Today, you sold all of your shares for $15.60 a share. What is your total percentage return on this investment?

更多留学生实用工具

智能学习助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单