Suppose a stock had an initial price of $121 per share, paid a dividend of $3.30

Question

Suppose a stock had an initial price of $121 per share, paid a dividend of $3.30 per share during the year, and had an ending share price of $153. Requirement 1: 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).) Percentage total return % Requirement 2: 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).) Dividend yield % Requirement 3: 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).) Capital gains yield %

Explanation / Answer

Answer 1 Percentage Total Return =[{(P1 - P0) + D} / P0] * 100 P1 = Ending share price = $153 P0 = Initial share price = $121 D = Dividend = $3.30 Percentage Total Return ={(153 - 121) + 3.30} / 121 * 100 = 29.17% Answer 2 Dividend yield = (D / P0) * 100 = (3.30 / 121)*100 = 2.73% Answer 3 Capital Gain Yield = [(P1 - P0) / P0] * 100 = [(153 - 121)/121] * 100 = 26.45%

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