What is the total return for an investor who purchased shares for $30 each, received a $1.20 dividend, and after one year sold them for $36 each?

To determine the total return for the investor, we first need to calculate both the capital gain and the dividend income.

The capital gain is calculated by taking the difference between the selling price and the purchase price of the shares. The investor bought the shares for $30 each and sold them for $36 each. Thus, the capital gain per share is:

Selling Price - Purchase Price = $36 - $30 = $6

Next, the investor also received a dividend of $1.20 per share. Therefore, the total income from dividends also needs to be included in the total return calculation.

To find the total return, we combine the capital gain and the dividend income per share:

Total Income = Capital Gain + Dividend = $6 + $1.20 = $7.20

Now, we express the total return as a percentage of the initial investment. The initial investment per share was $30. Thus, the total return percentage is calculated as follows:

Total Return % = (Total Income / Initial Investment) x 100

Total Return % = ($7.20 / $30) x 100 = 24%

Therefore, the total return for the investor is 24%, which correctly corresponds to the provided answer. This result emphasizes