Suppose a stock had an initial price of $79 per share, paid a dividend of $1.45
ID: 2815003 • Letter: S
Question
Suppose a stock had an initial price of $79 per share, paid a dividend of $1.45 per share during the year, and had an ending share price of $71. What was the total return? What was the dividend yield? The capital gains yield? Initial price Dividend paid Ending share price $ 79 1.45 71 10 Complete the following analysis. Do not hard code values in your calculations. 12 13 14 15 16 17 18 19 I need to know how to type this in since it says do not hard code values. Total return Dividend yield Capital gains yield
Explanation / Answer
Initial Price (P0) = $ 79
Dividend paid(D1) = $ 1.45
Ending share price (P1) = $ 71
Total return = (P1 - P0)+ D1 = (71-79)+1.45=-$ 6.55
Total return(%) = {(P1 - P0)+ D1} / P0
= {(71-79)+1.45}/ 79
= (-8+1.45)/79
= -6.55/79
= -0.0829 or say -8.29%
Dividend yield ($) = $1.45
Dividend yield (%) = Dividend paid(D1)/ Market price per share(P1)
= 1.45/71
= 2.04%
Capital Gains Yield = Ending share price (P1)- Initial Price (P0)
= 71-79 = -$8.00
Capital Gains Yield(%)=Ending share price (P1)- Initial Price (P0)/ Initial Price (P0)
= {(71-79)/ 79
= -8/79
= -10.13%
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