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Total Return

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Supposing an investor buys a stock for $40 per share and sells it for $45 after one year. At the end of that year, the dividend per stock is $1. The company has 100,000 shares outstanding and a total profit for the year of $800,000.

What is the total return for the investor?

What is the price-earnings ratio for this firm at the time the stock was sold?

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Solution Summary

The solution calculates the total return and the PE ratio for the scenario provided.

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