
Sprint Nextel Corporation stock ended the previous year at $25.00 per share. It paid a $2.57 per share dividend last year. It ended last year at $18.89. If you owned 650 shares of Sprint, what was your dollar return and percent return?

To calculate the dollar return and percent return on Sprint Nextel Corporation stock, we need to consider both the dividend received and the change in stock price over the year.

### Step-by-Step Calculation:

#### 1. **Identify the Given Values:**
- **Initial Stock Price** ($P_0$): $25.00 per share
- **Ending Stock Price** ($P_1$): $18.89 per share
- **Dividend Paid** ($D$): $2.57 per share
- **Number of Shares** ($N$): 650 shares

#### 2. **Calculate Total Dividend Received:**
\[
\text{Total Dividend} = D \times N = 2.57 \times 650 = 1,670.50
\]

#### 3. **Calculate Change in Stock Price:**
\[
\text{Change in Stock Price} = P_1 - P_0 = 18.89 - 25.00 = -6.11 \, \text{(per share)}
\]

#### 4. **Calculate Total Change in Value of Stock Holdings:**
\[
\text{Total Change in Value} = \text{Change in Stock Price} \times N = (-6.11) \times 650 = -3,971.50
\]

#### 5. **Calculate Dollar Return:**
The dollar return includes both the dividend received and the loss or gain from the change in stock price.

\[
\text{Dollar Return} = \text{Total Dividend} + \text{Total Change in Value} = 1,670.50 - 3,971.50 = -2,301.00
\]

#### 6. **Calculate Percent Return:**
Percent return is calculated based on the initial investment.

- **Initial Investment**:
\[
\text{Initial Investment} = P_0 \times N = 25.00 \times 650 = 16,250.00
\]

- **Percent Return**:
\[
\text{Percent Return} = \left(\frac{\text{Dollar Return}}{\text{Initial Investment}}\right) \times 100
\]

\[
\text{Percent Return} = \left(\frac{-2,301.00}{16,250.00}\right) \times 100 = -14.16\%
\]

### Summary:
- **Dollar Return:** $-2,301.00$
- **Percent Return:** $-14.16\%$

This indicates that the investment in Sprint Nextel Corporation stock resulted in a loss of $2,301.00, which corresponds to a negative return of 14.16%.

---

Do you have any questions or would you like more details on any part of the calculation?

Here are 5 related questions you might be interested in:

1. How would the dollar return change if the dividend amount was different?
2. What is the impact of stock price volatility on percent return calculations?
3. How can dividends influence the overall return of a stock investment?
4. What are the risks associated with stocks that pay high dividends?
5. How do you calculate the break-even point for stock investments considering dividends and stock price changes?

**Tip:** When calculating percent returns, always use the initial investment as the base to assess the impact of dividends and price changes on overall performance.

Learn how to calculate the dollar return and percent return on Sprint Nextel Corporation stock. Includes step-by-step calculation of dividend received, change in stock price, and overall investment return. Suitable for advanced high school students and those interested in finance and stock market analysis.

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