3.012 Suppose a stock had an initial price of $62 per share, paid a dividend of

Question

3.012

Suppose a stock had an initial price of $62 per share, paid a dividend of $2.50 per share during the year, and had an ending share price of $49.

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 $62 per share, paid a dividend of $2.50 per share during the year, and had an ending share price of $49.

Explanation / Answer

Percentage Total Return = $ [ ( 49 - 62) + 2.50] / $ 62 = - 0.1694 or - 16.94 %

Dividend Yield = $ 2.50 / $ 62 = 0.0403 = 4.03 %

Capital Gains Yield = $ ( 49 - 62) / $ 62 = - 0.2097 or - 20.97 %

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