Question

One year ago, Debra purchased 5,400 shares of KNF stock for $218,056. Today, she sold those shares for $19.49 a share. What is the capital gains yield on this investment if the dividend yield is 1.7 percent?

A.-28.01 percent
B.-48.28 percent
C.3.07 percent
D.-51.73 percent
E.4.53 percent

Answer 1

Capital gain yield will be -51.73%

So option (d) will be the correct answer

Step-by-step explanation:

We have given that Debra purchased 4500 shares of KNF stock for $218056

So price of one share
`=(218056)/(5400)=$48.380`

So the beginning price = $40.380

She sold the share at price of 19.49 per share

So ending price = $19.49

We have to find the capital gain yield

We know that capital gain yield is given by

Capital gain yield
`=(end\ price-beginning\ price)/(begninning \ price)=(19.49-40.380)/(40.390)=-51.73` %

So option (d) will be correct option