Suppose a stock had an initial price of $70 per share, paid a dividend of $2.30

Question

Suppose a stock had an initial price of $70 per share, paid a dividend of $2.30 per share during the year, and had an ending share price of $55.

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

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

Suppose a stock had an initial price of $70 per share, paid a dividend of $2.30 per share during the year, and had an ending share price of $55.

Explanation / Answer

Total Return = Dividend/ Change in Price = 2.3/70-55 = 2.3/15 15.33% Total Return is 15.33% Dividend Yield = 2.3/55 = 4.18% Capital Gain Yield = 70-55/55 = 15/55 Capital Gain Yield = 27.27%

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