Question

On January 1 of the current year, the price of a stock is $42.50, whereas on December 31 of the current year, the price of the stock is $48.78. Determine the capital gain yield of the stock.a. 13.25% b. 14.78% c. 15.14% d. 16 33% e. 17.49%

Answer 1

b. 14.78%

Step-by-step explanation:

Given that

Initial price at the starting of the year = $42.50

And, the ending share price at the ending of the current year = $48.78

The computation of the capital gain yield is shown below:

= (Ending share price - initial price) ÷ (Initial price) × 100

= ($48.78 - $42.50) ÷ ($42.50) × 100

= $6.28 ÷ $42.50 × 100

= 14.78%