Lesson: Economic Return

In this lesson, Nick Palazzolo, CPA, breaks down the components of economic return, illustrating how to measure the profitability of an investment. He takes you through a practical example, calculating the return by comparing the cash inflows from dividends and gains in stock value against the initial outflows of investment. By working through the mechanics of computing gains per share and total dividends, Nick translates these figures into an understandable economic return percentage, making sure every step is clear and approachable. Through this example, he demystifies the formula and showcases the dynamic nature of investment returns, whether dealing with gains or losses.