Suppose a stock had an initial price of $88 per share, paid a dividend of $1.90

Question

Suppose a stock had an initial price of $88 per share, paid a dividend of $1.90 per share during the year, and had an ending share price of $73.50.

Compute the percentage total return. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

What was the dividend yield? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

What was the capital gains yield? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Compute the percentage total return. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Explanation / Answer

Hi,

Please find the detailed answer as follows:

Part 1:

Total Percentage Return = (Dividend + Closing Share Price - Opening Share Price)/Opening Share Price*100 = (1.90 + 73.50 - 88)/88*100 = -14.32%

Part 2:

Dividend Yield = Dividend Per Share/Opening Share Price = 1.90/88*100 = 2.16%

Part 3:

Capital Gains Yield = (Closing Share Price - Opening Share Price)/Opening Share Price = (73.50 - 88)/88*100 = -16.48%

Thaks.

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