Question

You purchased shares of Apple (AAPL) on 31 August 2018 for $225.87 per share. Recently, the stock sold for $203.86 per share. During the time you owned the stock, you received dividend payments of $0.73 per share twice (8 November 2018 and 8 February 2019). What is your percentage return on this investment?

Answer 1

Solution:

The formula for calculating the investor’s percentage return on the investment is

= [ ( Sale price + Dividends earned - Purchase Price ) / Purchase Price ]

As per the information given in the question

Sale price per share = $ 203.86 ;

Purchase price per share = $ 225.87

Dividend per share = $ 0.73

Total dividend earned = $ 0.73 * 2 = $ 1.46

( Since dividend was earned twice during the period of holding )

Applying the above values in the formula we have

=[ ( 203.86 + 1.46 – 225.87 ) / 225.87 ]

= ( - 20.55 / 225.87 )

= - 0.0910

= - 9.10 %

Thus the investor’s percentage return on the investment = - 9.10 %