An investor purchases 1,000 shares of ABC stock at $30 per share and receives an annual dividend of $1.20. After one year, the stock's market value increases to $36 per share. What is the total return for the investor?

To determine the total return for the investor, you need to consider both the capital gains and the income received from dividends.

First, calculate the initial investment. The investor bought 1,000 shares at $30 each, which totals $30,000 (1,000 shares * $30/share).

Next, calculate the annual dividend income. Since the annual dividend is $1.20 per share, the total dividend income for 1,000 shares is $1,200 (1,000 shares * $1.20/share).

Now, look at the market value of the stock after one year. The share price increased to $36, meaning the total market value of the shares is now $36,000 (1,000 shares * $36/share).

Next, calculate the total return, which includes both the capital gain from the increase in stock price and the dividend income. The capital gain is the difference between the new stock value and the initial investment: $36,000 - $30,000 = $6,000.

Now, add the dividend income to the capital gain to determine the total return: $6,000 (capital gain) + $1,200 (dividend) = $7,200.