Question

A stock is bought for $23.00 and sold for $27.00 one year later, immediately after it has paid a dividend of $1.50. what is the capital gain rate for this transaction

Answer 1

P1 = $27
P0 = $23

To solve:
Capital gain rate = (P1 - P0)/P0
Capital gain rate = ($27.00 - $23.00)/$23.00
Capital gain rate = $4/$23
Capital gain rate = 0.1739
Capital gain rate = (0.1739)(100)
Capital gain rate = 17.39%