Suppose a stock had an initial price of $93 per share, paid a dividend of $1.90

Question

Suppose a stock had an initial price of $93 per share, paid a dividend of $1.90 per share during the year, and had an ending share price of $111.

Compute the percentage total return. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

What was the dividend yield? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

What was the capital gains yield? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Compute the percentage total return. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Explanation / Answer

1. The percentage total return (R) = [$1.9 + ($111 - 93)]/$93 = 21.39%

2. The dividend yield = $1.9/$93 = 2.04%

3. The capital gains yield = ($111 - 93)/$93 = 19.35%

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