Question

Suppose a stock had an initial price of $65 per share, paid a dividend of $1.45 per share during the year, and had an ending share price of $58.

a,


Compute the percentage total return. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)


b.


What was the dividend yield and the capital gains yield? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Answer 1

total return = -8.54 %

dividend yield = 2.23 %

capital gains yield = -10.77 %

Step-by-step explanation:

given data

initial price = $65 per share

paid a dividend = $1.45 per share

ending share price = $58

to find out

percentage total return and dividend yield and the capital gains yield

solution

first we calculate here total return that is express as

total return = close price - opening price + dividend ÷ opening price ...........1

put here value we get

total return =
`(58+65-1.45)/(65)`

total return = -8.54 %

and

now we get dividend yield as

dividend yield =
.............2

put here value we get

dividend yield =
`(1.45)/(65)`

dividend yield = 2.23 %

and

now we get here capital gains yield that is express as

capital gains yield = closing price - opening price ÷ opening price ..........3

put here value we get

capital gains yield =
`(58-65)/(65)`

capital gains yield = -10.77 %