Suppose a stock had an initial price of $72 per share, paid a dividend of $1.20

Question

Suppose a stock had an initial price of $72 per share, paid a dividend of $1.20 per share during the year, and had an ending share price of $61.

Compute the percentage total return. (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16))

What was the dividend yield and the capital gains yield? (Negative amount should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16))

Suppose a stock had an initial price of $72 per share, paid a dividend of $1.20 per share during the year, and had an ending share price of $61.

Explanation / Answer

Dividend yield = dividend/price = 1.2/72 = 1.67%

Capital gains yield = ending price/beginning price - = 61/72 - 1 = -15.28%

total return = Dividend yield + Capital gains yield = 1.67 -15.28 = 13.61%

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