a$)$ A stock is selling today for K$45$ per share. At the end of the year, it pays a dividend of K$3$ per share and sells for K$49.$ What is the total rate of return on the stock? What are the dividend yield and capital gains yield?

b$)$ You purchase $100$ shares of stock for K$40$ a share. The stock pays a K$2$ per share dividend at year$-$end. What is the rate of return on your investment for these end$-$of$-$year stock prices? What is your real $($inflation$-$adjusted$)$ rate of return? Assume an inflation rate of $5\%.$

a$.$ K$38$

b$.$ K$40$

c$.$ K$42$