Question

Assuming you purchased a share of stock for $36.00 one year​ ago, sold it today for $40.85, and during the year received a dividend payment of $1.73, calculate the​ following:

a. Income.

b. Capital gain​ (or loss).

c. Total return

     ​(1) In dollars.

​     (2) As a percentage of the initial investment.

Answer 1

given original stock price= 36

original stock price=40.85

dividend income=1.73

So

A) Income = $1.73. It is the answer because income means how muc additional amount you have earned from the stocks.

B) capital gain occurs when difference between selling price and cost price is positive else it is loss.

capital gain = 40.85-36 = $4.85

C) Total return = (current value- original value + income)= 40.85-36+1.73 =$6.58

In percentage= 6.58/36=18.28% ( fixed to two decimal places)