You bought a stock one year ago for $51.06 per share and sold it today for $59.1

Question

You bought a stock one year ago for $51.06 per share and sold it today for $59.19 per share. It paid a $1.63

per share dividend today.

a. What was your realized return?

b. How much of the return came from dividend yield and how much came from capital gain?

a. What was your realized return?

The realized return was ___________ (Round to two decimal places.)

b. How much of the return came from dividend yield and how much came from capital gain?

The return that came from dividend yield is ___________ (Round to two decimal places.)The return that came from capital gain is __________ (Round to two decimal places.)

Explanation / Answer

Answer to Part a)

Realized return = (Selling Price + Dividend – Purchase Price) / Purchase Price * 100
Realized return = (59.19 + 1.63 – 51.06) / 51.06 * 100
Realized return = 9.76/51.06 * 100
Realized return = 19.11%

The Realized Return was 19.11%

Answer to Part b)

Dividend Yield = Dividend / Purchase Price * 100
Dividend Yield = 1.63 / 51.06 * 100
Dividend Yield = 3.19%

Capital Gain = (Selling Price – Purchase Price) / Purchase * 100
Capital Gain = (59.19 – 51.06)/ 51.06 * 100
Capital Gain = 15.92%

The return that came from dividend yield is 3.19%. The return that came from capital gain is 15.92%

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.