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Homework answers / question archive / a stock is selling today for $75 per share, at the end of the year it pays a dividend of $3 per share and sells for $84
a stock is selling today for $75 per share, at the end of the year it pays a dividend of $3 per share and sells for $84.
what is the total rate of return on the stock?
what are the dividend yield and percentage per capital gain??
now suppose the year end return stock price after the dividend is paid at $72 what are the dividend yield and percentage capital gain in this case??
a.
Rate of return on the stock= (84+3-75)/75
=16.00%
b.
Dividend yield= 3/ 75
=4.00%
Capital gain yield= (84- 75)/ 75
=12.00%
c.
dividend yield= 3/ 75
=4.00%
Capital gain yield= (72- 75)/ 75
=-4.00%
