Chapter 5, Problem 5PROB

Summary Introduction

The rate of return on an investment is the profit or loss on yields of investment which are gained by an investor.

$\text{Yield}=\frac{\left[\begin{array}{r}\left(\text{No}\text{. of shares}\times \text{Current price per share}\right)-\\ \left(\text{No}\text{. of shares}\times \text{Original price per share}\right)\end{array}\right]+\left(\begin{array}{r}\text{No}\text{. of shares}\times \\ \text{Dividend per share}\end{array}\right)}{\left(\text{No}\text{. of shares}\times \text{Original price per share}\right)}$

The number of outstanding shares is 1,000 sold for $45 each. Two years ago, the purchase price per share is $50. The quarterly dividend is $0.50.