Question

Wanda Sotheby purchased 145 shares of Home Depot stock at $149 a share. One year later, she sold the stock for $53 a share. She paid her broker a commision of $39 when she purchased the stock and a commision of $46 when she sold it. During the 12 months she owned the stock, she received $128 in dividends. Calculate Wanda’s total return on this investment. (

Answer 1

Answer:

Total return investment % = -0.641 or -64.1%

Explanation:

Given:

Number of share = 145 shares

Purchase price = $149 per share

Sale price = $53

Commission on purchase = $39

Commission on sale = $46

Dividend received = $128

Computation:

Purchase value of share = [Number of share × Purchase price] + Commission on purchase

Purchase value of share = [145 × $149] + $39

Purchase value of share = $21,605 + $39

Purchase value of share = $21,644

Sale value of share = [Number of share × sale price] - Commission on sale

Sale value of share = [145 × $53] - 46

Sale value of share = $7,639

Total return = Sale value of share - Purchase value of share + Dividend received

Total return = $7,639  - $21,644 + $128

Total return = - $13,877

Total return investment % = - $13,877 / $21,644

Total return investment % = -0.641 or -64.1%