Suppose a stock had an initial price of $101 per share, paid a dividend of $2.30

Question

Suppose a stock had an initial price of $101 per share, paid a dividend of $2.30 per share during the year, and had an ending share price of $123. Requirement 1: Compute the percentage total return. (Do not include the percent sign (%). Round your answer to 2 decimal places. Percentage total return ???% Requirement 2: What was the dividend yield? (Do not include the percent sign (%). Round your answer to 2 decimal places. Dividend yield ???% Requirement 3:What was the capital gains yield? (Do not include the percent sign (%). Round your answer to 2 decimal places. Capital gains yield ???%

Explanation / Answer

Po=101, D1=2.30, P1 = 123 1. Compute the percentage total return. Return during Year = Div + Gain in Price = 2.30+(123-101) = 24.30 So %Total Return = 24.30/101 = 24.06% 2. What was the dividend yield DIv Yield = Div/P0 = 2.30/101 = 2.28% 3. What was the capital gains yield? Cap Gain yield = (P1-P0)/P0 = (123-101)/101 = 21.78%

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