Answer to Question #174531 in Microeconomics for Oliva

Question

QUESTION ONE

Mrs.Chausiku Mwendapole purchased share of ALI BABA for TZS 700 and received 

a dividend per share of TZS 100 on 31st December 2020. Currently the share price is 

worth TZS 800.

REQUIRED

Calculate the returns in TZS and percentage from the investment

Answer 1

$P1 = 700$; $P2 = 800$; $R = 100$

Let's find the percentage change $\Delta$

$\%\; =\; (P2-P1)/P1$$\Delta = (P2-P1)/P1 = 100/700= 0.1428$

Let's the returns $ROI = R/P1 = 100/700 = 0.1428$

Answer: both ROI and the percentage change are 14.3%