You bought a stock one year ago for $48.48 per share and sold it today for $59.2

Question

You bought a stock one year ago for $48.48 per share and sold it today for $59.22 per share. It paid a $1.43 per share dividend today. If you assume that the stock fell $4.70 to $43.78 instead: a. Is your capital gain different? Why or why not? b. Is your dividend yield different? Why or why not? a. Is your capital gain different? Why or why not? (Select the best choice below.) 0 A. The capital gain will not be different because the purchase price did not change. O B. The capital gain will be different because the selling price has changed. ° C. The capital gain will be different because the dividend did not change. O D. The capital gain will not be different because the selling price is less than the purchase price

Explanation / Answer

B, Capital gain will be different because the selling has changed.

Capital gain depends on selling price, but not on dividends. Hence change in the selling price is the reason for change in capital gain.

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