Suppose a stock had an initial price of $50 per share. paid a dividend of $.80 p

Question

Suppose a stock had an initial price of $50 per share. paid a dividend of $.80 per share during the year, and had an ending share price of $38. Compute the total percentage return. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign. Enter your answer as a percent rounded to 2 decimal places, e.g, 32.16.) Total return % ok What was the dividend yield and the capital gains yield? (Do not round intermediate calculations. A negative answer should be indicated by a minus sign. Enter your answers as a percent rounded to 2 decimal places, e.g. 32.16.) Dividend yield Capital gains yield

Explanation / Answer

Total % return=(End price-Beginning price+Dividends)/(End price-Beginning price

=(38-50+0.8)/50

=(22.4%)(Negative).

Dividend yield=Dividend/Beginning price

=(0.8/50)

=1.6%

Capital gains yield=(End price-Beginning price)/Beginning price

=(38-50)/50

=(24%)(Negative).

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