Question

Over the last quarter, Verizon Communications, Inc. (ticker symbol VZ) common

stock paid the dividends and had (unadjusted) closing prices given below. Assume these
dates are spaced exactly one quarter apart – do not convert to days!
Date Dividend. Price .
1/9/2023 $0.653 $41.37
10/6/2022 $0.653 $37.25
Suppose that on 10/6/2022, after the dividend had been paid to the previous owner, you
bought the stock at the closing price that day. You held the stock for one quarter (until
1/9/2023), received the dividend, and then sold it at the closing price. Calculate the one-
quarter dividend yield, capital gains yield, and total return for the quarter that you held the
Verizon stock.
Dividend:
Cap Gains:
Total:

Answer 1

For Verizon stock, the one-quarter dividend yield is 1.75%, the capital gains yield is 11.06%, and the total return for the quarter is 12.81%, considering a $0.653 dividend paid and stock price movement from $37.25 to $41.37.

Step-by-step explanation:

To calculate the one-quarter dividend yield, capital gains yield, and total return for Verizon Communications, Inc. (ticker symbol VZ), we use the following information: On 10/6/2022, the stock was purchased at a closing price of $37.25, and then on 1/9/2023, the stock was sold at the closing price of $41.37. During this quarter, a dividend of $0.653 was paid.The dividend yield is calculated by dividing the dividend payout by the purchase price: $0.653 / $37.25 = 0.0175 or 1.75%.The capital gains yield is found by dividing the change in stock price by the purchase price: ($41.37 - $37.25) / $37.25 = $4.12 / $37.25 = 0.1106 or 11.06%.

To determine the total return, we add the dividend yield to the capital gains yield: 1.75% + 11.06% = 12.81%.Therefore, the one-quarter dividend yield is 1.75%, the capital gains yield is 11.06%, and the total return for the quarter is 12.81%.