Suppose you bought 600 shares of stock at an initial price of $45 per share. The

Question

Suppose you bought 600 shares of stock at an initial price of $45 per share. The stock paid a dividend of $.42 per share during the following year, and the share price at the end of the year was $46.

What is the capital gains yield? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

What is the dividend yield? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

What is the total rate of return on the investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the"%"sign in your response.)

Suppose you bought 600 shares of stock at an initial price of $45 per share. The stock paid a dividend of $.42 per share during the following year, and the share price at the end of the year was $46.

Explanation / Answer

1. capital yield= ($46 - $45) / $45= 2.22%

2. dividend yeild= 0.42 / 45= 0.933%

3. total return on investment= 3.15%

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