Suppose a stock had an initial price of $97 per share, paid a dividend of $2.10

Question

Suppose a stock had an initial price of $97 per share, paid a dividend of $2.10 per share during the year, and had an ending share price of $117.

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?

Suppose a stock had an initial price of $97 per share, paid a dividend of $2.10 per share during the year, and had an ending share price of $117.

Explanation / Answer

Requirement 1.

percentage total return = (Ending Share Price - Initial Share Price+Divident Gain)/Initial Share Price

= (117-97+2.10)/97 = 22.78%

Requirement 2.

Divident Yield = Annual Dividents per share/Initial Price per share

= 2.10/97 = 2.16%

Requirement 3

Capital Gain = Gain in Share Price/Initial Share Price

=(117-97)/97 = 20.62%

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