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4. Rate of return (yield) The rate of return, or yield, is the total return on an investment expressed as a percentage of its purchase

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4. Rate of return (yield) The rate of return, or yield, is the total return on an investment expressed as a percentage of its purchase price. The rate of return is usually stated on an annualized basis. For example, if you have an investment worth $1,000 that yields $120 of total retum per year, then the investment would have a 12% annual rate of return (or yield). Consider the following example: Maylin has purchased 100 shares of Z8F Corporation stock at a purchase price of $35 per share, Over the next year, Z8F Corporation pays a total of $5 per share in dividends to its shareholders. At the end of the year, Maylin seils her Zsf Corporation stock for $39 per share, In addition, Maylin paid a transaction cost of $1 per share both at the time of purchase and at the time of sale. Part A-Current Income (Dividends): Over the year that Maylin owns her shares of Z\&F Corporation stock, she receives a total of 5 . in current income in the form of dividends. Part B-Capital Gains: The total amount that Maylin has paid for her Z8F Corporation stock is 5 . The total amount of money that Maylin recelves after selling her shares of Z8F Corporation stock is $ Therefore, Maylin's investment achieves a capital gain of 5 Part C-Total Return: Over the year that she owns the Z8F Corporation stock, Maylin earns a total return of $ Part D-Rate of Return (Yleld): The rate of return on an investment is the total return on the investment expressed as a percentage of its price. Calculate the rate of return by dividing the total retum by the total purchase price (not including transaction costs because these are already taken into account in the capital gains portion of the total return). Round your rate of return to two decimal places. In the example given, the total return is 5 , and the total purchase price (excluding transaction costs) is 5 Therefore, the rate of return on Maylin's investment in 28F Corporation stock is

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