Suppose a stock had an initial price of $86 per share, paid a dividend of $1.70 per share during...

Question:

Suppose a stock had an initial price of $86 per share, paid a dividend of $1.70 per share during the year, and had an ending share price of $72.50.

1: Compute the percentage total return.

2: What was the dividend yield?

3: What was the capital gains yield?

Answer and Explanation:

Question 1)

Percentage return
= (Closing Price + Receipts - Opening price) / Opening Price x 100
= (72.50 + 1.70 - 86) / 86 x 100
= -13.72%

Question 2)

Dividend yield
= Dividend / Initial price x 100
= 1.70 / 86 x 100
= 1.98%

Question 3)

Capital gains yield
= (Closing price - Opening price) / Opening price x 100
= (72.50 - 86) / 86 x 100
= -15.70%


Learn more about this topic:

Return on Investment: Definition, Formula & Example

from Intro to Business: Help and Review

Chapter 25 / Lesson 6
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