How To Calculate Percentage Return On Stock

Stock Return Percentage Formula:

\[ \text{Return %} = \frac{\text{Ending Price} - \text{Beginning Price} + \text{Dividends}}{\text{Beginning Price}} \times 100 \]

Return % (%):

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1. What is Stock Return Percentage?

Stock return percentage measures the total gain or loss on a stock investment, including both price appreciation and dividend income. It provides a comprehensive view of investment performance over a specific period.

2. How Does the Calculator Work?

The calculator uses the stock return percentage formula:

\[ \text{Return %} = \frac{\text{Ending Price} - \text{Beginning Price} + \text{Dividends}}{\text{Beginning Price}} \times 100 \]

Where:

\( \text{Ending Price} \) — Current stock price or selling price (USD/share)
\( \text{Beginning Price} \) — Original purchase price (USD/share)
\( \text{Dividends} \) — Total dividends received during holding period (USD)

Explanation: This formula calculates the total percentage return by considering both capital gains (price appreciation) and income (dividends) relative to the initial investment.

3. Importance of Stock Return Calculation

Details: Calculating stock return percentage is essential for evaluating investment performance, comparing different investments, making informed buy/sell decisions, and assessing portfolio growth over time.

4. Using the Calculator

Tips: Enter ending price and beginning price in USD per share, and total dividends received in USD. All values must be positive numbers, with beginning price greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What is a good stock return percentage?
A: A good return varies by market conditions and risk tolerance. Historically, the S&P 500 has averaged about 7-10% annually after inflation.

Q2: Should I include dividends in return calculations?
A: Yes, dividends are part of total return. Ignoring them underestimates your actual investment performance.

Q3: How does this differ from annualized return?
A: This calculates total return for a period. Annualized return adjusts for different time periods to enable year-over-year comparisons.

Q4: What if I bought shares at different prices?
A: Use your average cost per share as the beginning price, or calculate returns separately for each purchase lot.

Q5: Does this account for taxes and fees?
A: No, this is pre-tax and pre-fee return. For net returns, subtract transaction costs and estimated taxes.