## Wednesday, October 15, 2014

### Returns from Microsoft since it went public.

Question:   Microsoft Corporation went public on March 13, 1986.   What would be he value of 100 shares in Microsoft purchased on the day it went public?

What is the value of the dividends received from holding this stock?

Answer:    The data needed for this calculation was obtained from Yahoo Finance.

Data on dividends and stock splits by Microsoft Corporation:

The other piece of information that I need for this problem is the current stock price, which I also got off yahoo.    When I looked at the stock on October 14 it was at \$44.05.   (Today it is a bit lower.)

Answer:   Microsoft stock split 9 times since going public.   Seven of the splits were 2 to 1.   Two of the splits were 1.5 to 1.

 Microsoft Stock Split History Date Ratio 18-Feb-03 2 29-Mar-99 2 23-Feb-98 2 9-Dec-96 2 23-May-94 2 15-Jun-92 1.5 27-Jun-91 1.5 16-Apr-90 2 21-Sep-87 2

The 100 original shares are now 28,800 shares.  (100 x 27 x 1.52 = 28,800).

At the current stock price of  \$44.05 this amounts to \$1,268,640.

The dividend history for an investor that purchased 100 shares of Microsoft at the time the firm went public and kept the shares until today are presented in the table below.

 Date Dividends Per Share Number of Shares \$ Dividends 19-Aug-14 0.28 28800 8064 13-May-14 0.28 28800 8064 18-Feb-14 0.28 28800 8064 19-Nov-13 0.28 28800 8064 13-Aug-13 0.23 28800 6624 14-May-13 0.23 28800 6624 19-Feb-13 0.23 28800 6624 13-Nov-12 0.23 28800 6624 14-Aug-12 0.2 28800 5760 15-May-12 0.2 28800 5760 14-Feb-12 0.2 28800 5760 15-Nov-11 0.2 28800 5760 16-Aug-11 0.16 28800 4608 17-May-11 0.16 28800 4608 15-Feb-11 0.16 28800 4608 16-Nov-10 0.16 28800 4608 17-Aug-10 0.13 28800 3744 18-May-10 0.13 28800 3744 16-Feb-10 0.13 28800 3744 17-Nov-09 0.13 28800 3744 18-Aug-09 0.13 28800 3744 19-May-09 0.13 28800 3744 17-Feb-09 0.13 28800 3744 18-Nov-08 0.13 28800 3744 19-Aug-08 0.11 28800 3168 13-May-08 0.11 28800 3168 19-Feb-08 0.11 28800 3168 13-Nov-07 0.11 28800 3168 14-Aug-07 0.1 28800 2880 15-May-07 0.1 28800 2880 13-Feb-07 0.1 28800 2880 14-Nov-06 0.1 28800 2880 15-Aug-06 0.09 28800 2592 15-May-06 0.09 28800 2592 15-Feb-06 0.09 28800 2592 15-Nov-05 0.08 28800 2304 15-Aug-05 0.08 28800 2304 16-May-05 0.08 28800 2304 15-Feb-05 0.08 28800 2304 15-Nov-04 3.08 28800 88704 23-Aug-04 0.08 28800 2304 15-Oct-03 0.16 28800 4608 19-Feb-03 0.08 28800 2304

Observations:

Microsoft has paid dividends since February 19 2003.

Total dividends for the 100-share investor are \$269,280.

The dividends received over the last four quarters were \$32,256.