You just sold 200 shares of XYZ Inc. stock at a price of $38.75 a share. Last year you paid $41.50 a share to buy this stock. Over the course of the year, you received dividends totaling $1.64 per share. What is your capital gain on this investment?
A) -$550
B) -$222
C) -$3
D) $550
E) $878

Question

Quizplus · Accepted Answer

The capital gain (or loss) is calculated by subtracting the purchase price from the selling price, then adjusting for dividends received. Here, the calculation is (38.75 - 41.50) * 200 + (1.64 * 200) = -550 + 328 = -$222. However, the question specifically asks for the capital gain on the investment, not the overall profit or loss, which includes dividends. The capital loss, before dividends, is (41.50 - 38.75) * 200 = -$550.

You Just Sold 200 Shares of XYZ Inc