Determining the Expected Rate of Return Problem Zoom Communications had a market price of $ 258

Finance Aug 10, 2020

Determining the Expected Rate of Return Problem

Zoom Communications had a market price of $ 258.73 on the day you purchased it just one year ago. During the past year the stock had paid a $0.09 dividend and closed at a price of $ 261.00. What rate of return did you earn on your investment in Zoom Communications?

Expert Solution

Computation of Rate of Return you earn on your investment in Zoom Communications:

Rate of Return = (Final Price - Initial Price + Dividend)/Initial Price

=($261 - $258.73 + $0.09)/$258.73

= $2.36/$258.73

Rate of Return = 0.91%

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