Question

The Rate of Return on an investment in shares is calculated as:

Options

• \[ \text{Rate of Return} = \frac{\text{Total Annual Dividend}}{\text{Total Investment}} \times 100 \]

• \[ \text{Rate of Return} = \frac{\text{Total Investment}}{\text{Total Annual Dividend}} \times 100 \]

• \[ \text{Rate of Return} = \frac{\text{Number of Shares}}{\text{Market Value}} \times 100 \]

• \[ \text{Rate of Return} = \text{Dividend } \% \times \text{Face Value} \]

Answer 1

Rate of Return = (Total Annual Dividend ÷ Total Investment) × 100. It expresses the percentage return earned on the amount actually invested.