Question

"You purchased GARP stock one year ago at a price of $68.54 per share. Today, you sold your stock and earned a total return of 18.91 percent. The stock paid dividends of $3.04 per share over the year. What was the capital gains yield on your investment

Answer 1

The capital gains yield on your investment is 15.87%.

Step-by-step explanation:

The capital gains yield on your investment can be calculated using the formula:

Capital Gains Yield = (Ending Price - Beginning Price) / Beginning Price

Given that the total return of your investment was 18.91%, and the dividends paid were $3.04 per share, we can calculate the capital gains yield:

Capital Gains Yield = Total Return - Dividends Yield

Substituting the values:

Capital Gains Yield = 18.91% - 3.04% = 15.87%.