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Suppose a Share of Stock Was Purchased 10 Years Ago

question 93

Essay

Suppose a share of stock was purchased 10 years ago for $10. One year ago it was worth $85 and today it is worth $81. A dividend of $.50 per share was paid by the corporation today. Calculate the rate of return for this stock.


Definitions:

Total Variable Costs

The total of all costs that vary with the level of production, including materials, labor, and other expenses that change with output.

Units of Output

The quantity of product that a company produces in a given period.

Marginal Costs

The increase in total production cost that arises from producing one additional unit of a good or service.

Average Fixed Cost Curve

A graph that shows the fixed costs of production divided by the quantity of output produced, illustrating how these costs dilute over larger production volumes.

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