You bought a stock one year ago for 

​$50.7850.78 

per share and sold it today for 

​$57.7357.73 

per share. It paid a 

​$1.421.42 

per share dividend today. What was your realized​ return? 

Question content area bottom

Part 1

The realized return was 

18.4518.45​%. 

 ​(Round to two decimal​ places.)

To calculate the **realized return** on the stock, we need to use the formula:

\[
\text{Realized Return} = \frac{\text{(Selling Price + Dividend - Purchase Price)}}{\text{Purchase Price}} \times 100
\]

Given:
- Purchase Price = $50.78
- Selling Price = $57.73
- Dividend = $1.42

Now, let's compute the realized return:

\[
\text{Realized Return} = \frac{(57.73 + 1.42 - 50.78)}{50.78} \times 100
\]

First, calculate the numerator:

\[
57.73 + 1.42 - 50.78 = 8.37
\]

Then, compute the percentage return:

\[
\text{Realized Return} = \frac{8.37}{50.78} \times 100 \approx 16.48\%
\]

The **realized return** is approximately **16.48%**, not 18.45%.

If you have further questions or need clarification, feel free to ask! Here are 5 related questions to deepen understanding:

1. How does the dividend affect the realized return calculation?
2. What is the difference between realized return and unrealized return?
3. How would the return change if the stock was sold at a different price?
4. How can we calculate annualized return if the holding period was longer than one year?
5. What factors should be considered when assessing if a realized return is good or bad?

**Tip:** Always account for dividends when calculating total return on stocks, as they can significantly impact the outcome!

You bought a stock one year ago for $50.78 per share and sold it today for $57.73 per share. It paid a $1.42 per share dividend today. What was your realized return? The realized return was 18.45%. (Round to two decimal places.)

Learn how to calculate the realized return on a stock purchased for $50.78 and sold for $57.73, with a $1.42 dividend. This step-by-step guide explains the formula and provides the correct percentage return. Suitable for finance students or investors.

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