Question
I bought a CSCO at this time last year for $20. The current price is $24 and CSCO paid a dividend of $1 per share over this time. What is my realized return?
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Answer to a math question I bought a CSCO at this time last year for $20. The current price is $24 and CSCO paid a dividend of $1 per share over this time. What is my realized return?
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4.697 Answers
Given:
Purchase price per share = $20
Current price per share = $24
Dividend per share = $1
Capital Gains (or Losses):
Capital gain (or loss) per share = Current price - Purchase price
Capital gain per share = $24 - $20 = $4
Dividends Received:
Dividends per share = $1
Now, to calculate the realized return, we sum up the capital gain and dividends received, and then divide by the purchase price:
Realized return per share = (Capital gain + Dividends) / Purchase price
Realized return per share = ($4 + $1) / $20 = $5 / $20 = 0.25
So, the realized return per share is indeed 0.25, or 25%. This means that for each share of CSCO you bought at $20, your investment has appreciated by 25% after considering both capital gains and dividends received.
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