A share is bought for $20.00 and sold for $24.00 one year later, immediately after it has paid a dividend of $1.50. What is the capital gain rate for this transaction?

Question

Quizplus · Accepted Answer

The capital gain is calculated based on the increase in the share price from the purchase price to the selling price, excluding dividends. The purchase price is $20.00, and the selling price is $24.00, so the capital gain is $4.00 on a $20.00 investment, which is a 20.00% gain.

A Share Is Bought for $20