Answered: What is the rate of return on an…

What is the rate of return on an investment that costs $5,000, earned a $600 dividend during the year, and is sold after 1 year for $4,400?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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What is the rate of return on an investment that costs $5,000, earned a $600 dividend during the year, and is sold after 1 year for $4,400?

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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