Suppose a stock had an initial price of $121 per share, paid a dividend of $3.30

Question

Suppose a stock had an initial price of $121 per share, paid a dividend of $3.30 per share during the year, and had an ending share price of $153. Requirement 1: Compute the percentage total return. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Percentage total return % Requirement 2: 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).) Dividend yield % Requirement 3: What was the capital gains yield? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Capital gains yield %

Explanation / Answer

Dividend Yield = Dividend / Initial price of the stock

= 3.30/121 i.e 2.73%

Capital Gain Yield =( Price at the end - Price at the beginning )/ Price at the beginning

= ( 153-121)/121 i.e 26.45%

Total Yield or total Return =( Dividend + Capital gain )/ Initial Price of the stock

= ( 3.30+32)/121

= 29.17%

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