If a stock rises 5% over the year, and it pays a dividend of 3%, does that mean your total profit is 8%?

Is that how it works?

bonus question: who's hotter: Olympia Snowe or Amanda Bee

bonus question #2: who's hotter: Aaron Schock or Jared Polis

12 Answers

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  • 9 years ago
    Favorite Answer

    Thats an over simplification. dividends are paid out at certain times and the value is based on what the stock is at at the time. but to generalize it you could say yes.

    Dont know Amanda Bee but Olympia Snow is due for an exit.

  • Anonymous
    9 years ago

    Sorry folks....all wrong.

    Example, a company has a stock valued at $100 and pays $2 yearly dividend.

    Stock goes toes up 5%, now is $105.

    Dividend goes up 3%, now is $2.60

    Total value of holdings $107.60

    Profit $7.60, or an increase of 7.2%.

  • 9 years ago

    No! The only real profit is NET PROFIT (after deducting all expenses like broker fees and taxes).

    You also do not state whether the reason for the rise in the market price is due to inflation (most likely) or due to increased profitably. Also, if the annual inflation rate (caused by government) has been in the range of 8% like it has recently then you have actually LOST real value.

  • Anonymous
    9 years ago

    Simple return, yes annuitized return no. The simple return would actually in reality be 6.8% because you have to pay obama is fair share.

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  • Anonymous
    9 years ago

    The dividend gives you 3% in your pocket that gets taxed, but the time frame depends on the dividend date, not necessarily an annual rate of 3%

    The profit isn't realized unless you sell the stock. So, no, you have a gain that has not been realized until you sell it but no profit.

  • 9 years ago

    According to the principles of Obamanomics ..I believe that your total profit is 16 % in 20012 however in 2007 your total profit would have been 4 %.

  • PoBoy
    Lv 7
    9 years ago

    The calculation you are looking for is called Total Return, from Stock Pro:

    This total return calculation includes dividend distributions, if applicable, when determining the return of a stock. The calculation is as follows:

    (Value of investment at the end of the year – Value of investment at beginning of the year) + Dividends / Value of investment at beginning of the year

    = Total Return

    I have no idea who is hotter, Olympia or Amanda. My decision variable is usually the one with bigger assets. I don't know who those guys are.

  • 9 years ago

    no

    you get 3% of your shares, and you only get to realize the increased value of the stock if you sell all your shares.

  • 9 years ago

    Only if you take your capital gain.

  • 9 years ago

    Essentially, yes. However, you only recognize the 5% gain in value, and pay taxes on it, when you sell the stock.

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