75% is the return on Mathew’s investment in one share if he purchased 100 shares of Blue Corporation for $100 per share.
Since Mathew purchased 100 shares at the price of $100 per share and now the stocks are trading at a price of $175, therefore if he sells the share he will gain $75 for each share. The return on Mathew’s investment in one share can be therefore calculated as follows;
Return on Mathew’s investment = profit ÷ purchase price
Substituting the values to determine the return on investment;
Return on investment = 75 ÷ 100
Return on investment = 0.75
Converting it into percentage by multiplying by 100 as follows;
Return on investment = 0.75 × 100 = 75%
Therefore; the return on investment in one share is calculated to be 75%
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