Answer:
Jennifer
The return on investment of the Gamma stock is:
a) 7%
Explanation:
a) Data and Calculations:
January 1, 20X1 Purchase of common stock of Gamma Corporation = $100,000
Dividend received from Gamma Corporation stock = $3,000
December 31, 20X1, Sale of Gamma Corporation stock = $104,000
Capital gains from the sale of Gamma stock = $4,000 ($104,000 - $100,000)
Total returns from the Gamma stock = Dividend Plus Capital Gains
= $7,000 ($3,000 + $4,000)
Return on investment of the Gamma stock = 7% ($7,000/$100,000 * 100)
