1. What is Stock Return Calculation?

The stock return calculation measures the total return on an equity investment, including both capital gains (or losses) and dividend income. It provides investors with a comprehensive view of investment performance.

2. How Does the Calculator Work?

The calculator uses the stock return equation:

Where:

• \( \text{Current Price} \) — Current market price of the stock (currency)
• \( \text{Purchase Price} \) — Original purchase price of the stock (currency)
• \( \text{Dividends} \) — Total dividends received during holding period (currency)

Explanation: The equation calculates the total return as a percentage of the original investment, accounting for both price changes and dividend income.

3. Importance of Stock Return Calculation

Details: Calculating stock returns helps investors evaluate investment performance, compare different investments, and make informed decisions about portfolio management.

4. Using the Calculator

Tips: Enter all values in the same currency unit. Current price and purchase price must be positive values. Dividends can be zero if no dividends were received.

5. Frequently Asked Questions (FAQ)

Q1: Should I include all dividends received?
A: Yes, include the total cumulative dividends received during your entire holding period of the stock.

Q2: What time period does this return represent?
A: The return represents the total return from purchase date to the current date, regardless of holding period length.

Q3: How does this differ from annualized return?
A: This calculates total return. Annualized return would adjust for the holding period length to show equivalent yearly return.

Q4: Should I factor in transaction costs?
A: For precise calculations, you may subtract any brokerage fees or transaction costs from the numerator.

Q5: Can this be used for negative returns?
A: Yes, the formula works for both positive and negative returns (losses).