Suppose a stock had an initial price of $61 per share, paid a dividend of $1.40

Question

Suppose a stock had an initial price of $61 per share, paid a dividend of $1.40 per share during the year, and had an ending share price of $69. 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

Total Return = Dividend Yeid + (Incerease in the value of share)Capital gain Yeild

1. Total Return= $1.40 + ($69-$61)

Total Return= $9.40

% Total return= ($9.40/$61) *100 = 15.41%

2. Dividend Yeild = $1.40

% Dividend Yeild=($1.40/ $ 61) *100 = 2.30 %

3. Capital Gain Yeild= $8.00

% Capital Gain Yeild= ($8 / $61) * 100 = 13.12%

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