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4 November, 19:00

Sprint Nextel Corp stock ended the previous year at $25.00 per share. It paid a $2.57 per share dividend last year. It ended last year at $18.89. If you owned 650 shares of Sprint, what was your dollar return and percent return? A. $2,960; 11.13%B. - $4,960; - 16.13%C. - $3,960; - 15.13%D.-$2,301; - 14.16%

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  1. 4 November, 22:51
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    D.-$2,301; - 14.16%

    Explanation:

    Answer:

    Explanation:

    Earnings per share is the profit that a business makes per outstanding shares of the company. Outstanding shares are all shares that have been issued by a company and on which they have obligation to pay dividends.

    The value of 650 shares of Sprint Nextel corp = 650*25 = $16,250

    Rate of return on Sprint Nextel shares = { (Ending price of shares - Beginning price of shares) + Dividend}/Beginning price of shares

    Rate of return on Sprint Nextel shares = { (18.89-25) + 2.57}/25

    Rate of return on Sprint Nextel shares = - 0.1416

    Dollar return on Sprint Nextel shares = Rate of return * Purchase price * Number of shares

    Dollar return on Sprint Nextel shares = - 0.1416 * 25 * 650 = - $2,301

    The percentage return = (Dollar return/Initial Total value of shares) * 100

    Percentage return = (-2,301/16,250) * 100 = - 14.16%
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