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How can I find the rate of return from an investment, including both capital gains when I sell it and dividends it paid while I held it?

Ideally, the answer should include the case where some or all of the dividends were reinvested.

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  • Have you contributed or cashed out anything since the initial investment (other than reinvesting dividends)?
    – D Stanley
    Commented Nov 28, 2022 at 0:11

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Without reinvestment: Add dividends over a year to price increase over a year (the latter may of course be negative). Divide that sum by the price at the start of the year. Multiply by 100 if you want it expressed as percent. If you want annual rate over N years, do the same but don't multiply by 100. Instead add 1, take the Nth root, and subtract 1 again. Then multiply by 100 if you want it in percent. See discussion elsewhere of compound returns.

Composite rate with reinvestment: That gets tricky. You would have to consider the share price at the time each dividend gets reinvested, determine the growth of the reinvested shares, compute their rate of gain, and account for the additional dividends each new share produces. There is probably a standard way to do this, but I've never attempted it... so I'm afraid this is a hint (boo, hiss) rather than a complete answer.

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