John purchased 140 shares of UGA Corporation for $10 per share last year. He received a $1.00 dividend per share. If he sells all of the shares for $15.00 each, what will be his capital gain in percentage terms? (Round answer to 0 decimal place, e. g. 55.)

Question

Akira Gibbs

Business

11 November, 08:33

John purchased 140 shares of UGA Corporation for $10 per share last year. He received a $1.00 dividend per share. If he sells all of the shares for $15.00 each, what will be his capital gain in percentage terms? (Round answer to 0 decimal place, e. g. 55.)

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Answers (1)

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Kennedi · Answer 1

John's capital gain is 50%

Explanation:

The dividends that John received are taxed as part of his gross income, but if he kept the UGA stock for more than a year and then sold it for a profit, his gain will be taxed as capital gains:

capital gain per stock = $15 (selling price) - $10 (purchase price) = $5

A $5 gain represents a 50% capital gain ( = ($5 / $10) x 100)