Question

At the start of the year, you purchase 200 shares of Manor Corporation at $25 per share. During the year, you receive $2.25 in dividends. At the end of the year, the stock price has declined to $20 per share. Calculate your total percentage return for the year.

Answer 1

The total percentage return for the year.

Purchase Value = $5,000 [200 Shares x 25.00]

Ending Value = $4,000 [200 Shares x $20.00]

Dividend received = $450 [200 Shares x $2.25]

Therefore, the total percentage return for the year = [(Ending Value – Purchase Value) + Dividend received] / Purchase Value

= [($4,000 - $5,000) + $450] / $5,000

= (-$1,000 + $450) / $5,000

= -$550 / $5,000

= -0.11 or

= -11.00% (Negative return)

“Hence, the total percentage return for the year will be -11.00% (Negative return)”