Francis Purchased a Stock One Year Ago for $20, and It

question 17

Multiple Choice

Francis purchased a stock one year ago for $20, and it is now worth $24. The stock paid a dividend of $3 during the year. What was the stock's rate of return from capital appreciation during the year?

• A) 17%
• B) 20%
• C) 29%
• D) 35%

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Definitions:

Variable Cost

Expenses that vary directly with the level of production or sales, such as materials or labor.

Target Net Profit

Target net profit is the specific amount of net income that a company aims to achieve within a certain period, guiding pricing, cost management, and sales volume strategies.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit. This figure shows how much each unit contributes to covering fixed costs and generating profit.

Fixed Costs

Expenses that do not change in total as production volume increases or decreases, such as rent and salaries.