Question

You purchased a stock at a price of $54.24. The stock paid a dividend of $1.39 per share and the stock price at the end of the year is $48.78. What are your capital gains on this investment?

Answer 1

Capital loss = $(5.46)

Step-by-step explanation:

Return on investment would be the proportion of the amount invested that is earned as profit.

Profit here includes dividends earned plus capital gains less broker's commission.

Capital gains/(loss) represents an appreciation/(depreciation) in the stock value. It is usually measures by the change in the stock value over the investment period under focus

Capital gain/loss on stock = stock price at the end - stock price at the beginning

Stock price at the end= 48.78

Stock price at the beginning = 54.24

Capital loss = (48.78 - 54.24) = $(5.46)

The dividend would not be included simply it is not a capital item

Capital loss = $(5.46)