Suppose the ABC Corporation had a stock price of $56.80 on December 31, 2006. On December 31, 2007, it has a stock price of $60.15. Over the year, it paid $2.00 in dividends per share. Calculate the total return of a share of ABC Corporation stock in 2007, showing your work.
What will be an ideal response?
We calculate the price appreciation as $60.15 ? $56.80 = $3.35. The price appreciation plus the $2.00 dividend is $5.35. The total return is then $5.35 รท $56.80 = 0.0942, or 9.42%.
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