Question

You purchased 200 shares of Microsoft stock on March 17, 2022 at $300.43 a share. The dividend yield at the time you purchased the stock was 1.0% at cost (assume the dividend remained the same for the year). You sold it today. March 18, 2023 at $278.14 What is your total dollar profit/loss and percent return?

Answer 1

The investor experienced a total dollar loss of $4,458 and a percent return of -7.45% on the sale of Microsoft stock after accounting for the capital loss from the decreased share price and the dividends received.

Step-by-step explanation:

The total dollar profit/loss from selling the Microsoft stock is calculated by first finding the capital loss from the sale of the shares and then adding the dividends received. The capital loss is found by subtracting the selling price per share from the purchase price per share and multiplying by the number of shares. Then, the annual dividend per share is calculated based on the dividend yield and the initial stock price and multiplied by the number of shares to find the total dividend income.

To compute the percent return, both the capital loss and dividend income are combined to determine the total return, which is then divided by the initial investment cost and multiplied by 100 to get the percentage.