A stock sold for $25 at the beginning of the year. The end of year stock price was $25.70. What is the amount of the annual dividend if the total return for the year was 7.7 percent?

$1.425 is the amount of the annual dividend if the total return for the year was 7.7 percent

Explanation:

At the beginning of the year,

Return = (dividend + capital gain)/price

Capital gain = price at the end of the year - price at the beginning of the year

Calculating dividend we get,

So, 7.7% = (dividend+0.50)/25

1.925 = dividend+0.50

or dividend = 1.925 - 0.50= $1.425

The annual dividend is $1.425

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