191k views
3 votes
on january 1, 2011 trent and patricia purchased 45 shares of walmart stock for $80.75 per share. four times per year (feb., may, aug., and nov.) they received $0.52 per share in dividends. on december 31, 2015 trent and patricia sell all 45 shares of walmart stock for $146.00 per share. what was trent and patricia's cumulative return in dollars and percent?

User JnPy
by
8.7k points

1 Answer

3 votes

First, let's calculate the total amount of dividends received:

Dividend per share = $0.52

Total shares = 45

Total dividends received per year = 4 x $0.52 x 45 = $93.60

Total dividends received from 2011 to 2015 (5 years) = $93.60 x 5 = $468.00

Next, let's calculate the total amount paid for the shares:

Shares purchased = 45

Purchase price per share = $80.75

Total cost of shares = 45 x $80.75 = $3,633.75

Finally, let's calculate the total amount received from selling the shares:

Shares sold = 45

Sale price per share = $146.00

Total proceeds from selling shares = 45 x $146.00 = $6,570.00

Now we can calculate the cumulative return:

Total return = total proceeds - total cost + total dividends

Total return = $6,570.00 - $3,633.75 + $468.00 = $3,404.25

To calculate the percentage return, we need to divide the total return by the total cost and multiply by 100:

Percentage return = (total return / total cost) x 100%

Percentage return = ($3,404.25 / $3,633.75) x 100% = 93.71%

Therefore, Trent and Patricia's cumulative return was $3,404.25 and their percentage return was 93.71%.

User Sidpat
by
7.7k points